Are we in recession? Because if so, it’s something very strange.
Indeed, we experienced two quarters of negative economic growth. Manufacturing demand is shrinking. Activity in the construction and housing markets has slowed. Technology companies are making deals. Financial services and real estate companies are laying people off. Inflation and energy costs remain high, interest rates are rising and the stock market is down 18% year-to-date. Just look at Google’s “recession” and you’ll see that the housing market is in one, big banks and investors are warning him one, and Europe is headed in one. More than 80 financial his advisers say a recession is ‘coming’ and one big investor thinks it will be ‘tremendous’.
But wait a minute.
Maybe we are in recession. Or maybe it’s coming. But when a recession hits, or is even likely, companies lay off employees. That’s not true, is it? Hiring continues to grow. The unemployment rate remains at historically low levels. The number of job openings is near a record high. And here’s the real shock: The majority of small businesses in the United States, which employ more than half of the nation’s workforce, are not only looking for jobs, they’re struggling to find employees. Independent Employment Data and Employment Data from Paychex, a recruitment agency.
The Paychex CEO told CNBC last week:
So why are businesses, especially small businesses, looking for workers instead of laying off workers?
First of all, it’s getting harder and harder to generalize about the US economy. The country has her 350 million population and her 30 million small businesses. Our economy is still 60% bigger than China and bigger than Japan, Germany, UK, France and Italy combined. California’s economy is bigger than India’s. New York’s economy is larger than Canada’s.
You can’t just say, “We’re in a recession.”
In the United States, some industries and geographies are doing better than others at any given time. Construction, financial services and manufacturing have struggled. So is the energy industry.but given getting a job Business services, retail, transportation and warehousing have shaken it up since the pandemic. The leisure and hospitality industry has lost more jobs than any other industry since the pandemic, but it looks like it’s coming back. For example, unemployment rates in Alaska, New Mexico, New York, and Pennsylvania were higher than the national average, while states such as Minnesota, Florida, and North Dakota had very low unemployment rates. A town whose biggest employer is struggling will struggle with it. But the reverse is also true.
So, is the United States in a “recession”? Judging by the above, the answer depends on who you ask.
Another reason most small businesses consider hiring is because most small business owners aren’t stupid.Democratic Party tell me We know there’s been a historic job increase in the last two years, but that’s because the bar was set at zero because of the pandemic. Republicans warn of recession and high inflation, but these things is caused by a myriad of factors — wars in Europe, supply chains in Asia, fiscal and monetary policy here in the United States — and these factors will eventually resolve themselves. It may not be as fast or as far as you would like. We are not fooled by politicians and rhetoric. We live this reality every day. And our reality is that demand is still relatively strong for the most part.
And if there’s one thing I’ve learned, it’s my smartest clients, business owners who have been doing the same thing for decades and generations, always looking ahead. That’s it. They don’t think much about 2022 or he the first half of 2023 now. They are planning and investing for his 2024 and beyond. They know that their customers, partners and employees (and their families) keep them alive. They, like me, don’t think a giant bubble or economic catastrophe is around the corner. Of course we could be wrong. But we are betting on the future now.
And we still know that people are our most valuable assets. Indeed, many companies are replacing low-skilled workers with robots and automation. But nothing can replace a skilled employee who is good at what they do. Find someone like that. Recession or not, I’m going to hire him. I know that if the person is treated properly, it will bring long-term benefits to my company, regardless of the short-term investment.
No, we are not in recession. And yes, we are in recession. No, we are not hiring. But yes. You can create a case either way. That’s what people do. they are right they are wrong argue. Meanwhile, small businesses in strong industries and growing regions will continue to employ. For those who don’t, don’t miss the opportunity to invest in top talent for when things finally turn around.