The New Normal: How will the rate hike affect jobs and the future of work?
News 12's Elizabeth Hashagen was joined by Bhushan Sethi and Julia W. Lamm to talk about jobs and the future of work.
The Federal Reserve escalated its fight against inflation last week, instituting a major rate hike and saying more will likely follow. The fallout from the rate hike will be a jump in the number of people unemployed.
The job losses forecast by the Fed would raise the unemployment rate from its current level of 3.7% to 4.4% - by the end of 2023. That means more than a million people will lose their jobs according to the research firm Inflation Insights.
And those job losses will disproportionately fall on some of the most vulnerable workers -- including minorities and less-educated employees, according to economists.
Big companies are already announcing layoffs, including Best Buy, Ford Motor, HBO Max, Peloton, Shopify, Walmart and Wayfair. PwC survey shows 50% of firms expect to reduce their labor forces in the next six to 12 months.
The survey also found that 46% of companies are removing new hire signing bonuses and 50% are reducing overall head count.
The Federal Reserve is raising interest rates at this point in an effort to slow down the job market, and that's going to mean more layoffs. This comes at a time when the labor market could hardly appear stronger. In July 2022, there were 11.2 million job openings, revealing a shortage of workers for available positions.
Is the "Great Resignation" over? In July, 6.4 million people got new jobs, while another 4.2 million quit jobs.
Tech, ecommerce and real estate had an explosive growth. Is it tilting back to normal now?