Economists are predicting that Canada is already experiencing the early stages of a recession. This downturn is being attributed to a number of factors, with the ongoing trade war with the United States playing a significant role. The projected economic contraction for the second and third quarters indicates a technical recession, a situation defined by two consecutive quarters of negative economic growth.
Unemployment is rising in Canada concurrently with this predicted contraction. This is a key indicator of a slowing economy, as businesses reduce their workforce in response to decreased demand and profitability. A rise in unemployment often translates to decreased consumer spending, further exacerbating the economic slowdown.… Continue reading
The New York Federal Reserve’s monthly Survey of Consumer Expectations revealed rising consumer anxieties regarding inflation, unemployment, and the stock market in March. One-year inflation expectations jumped to 3.6%, while the probability of higher unemployment surged to 44%, its highest since April 2020. Stock market optimism decreased significantly, falling to its lowest point since June 2022, although expectations for gold price increases rose. These findings align with other consumer sentiment surveys, indicating widespread concern about the economic impact of escalating trade tensions.
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Federal government layoffs, totaling 62,242 announced cuts across 17 agencies, represent the largest source of job losses. This surge, primarily attributed to a factor referred to as “DOGE” resulting in 63,583 layoffs, signifies a massive 41,311 percent increase compared to 2024 figures. The timing of these cuts conveniently avoids immediate reflection in February’s jobs report, while administration discussions focus on manipulating economic data. Substantial economic ripple effects are anticipated from these cuts and further reductions are expected.
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February’s job cut announcements reached a 12-year high, totaling 172,017, a 103% increase from January. Government sector cuts, primarily driven by the Department of Government Efficiency’s actions, accounted for a significant portion (one-third) of the total, with a staggering 41,311% increase from the previous February. These cuts, alongside bankruptcies and economic uncertainty, fueled the surge in layoff plans. While initial jobless claims remain low, the ADP report showed a significant slowdown in private sector hiring, suggesting potential weakening in the labor market.
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February’s private sector job growth plummeted to 77,000, significantly lower than January’s revised 186,000 and the predicted 148,000, marking the weakest increase since July. This slowdown, coupled with concerns over rising inflation from President Trump’s tariffs and weakening consumer spending, fuels anxieties about a broader economic deceleration. While annual pay growth remained steady at 4.7%, the hiring slump suggests employers are hesitant due to prevailing economic uncertainty. This weak jobs report follows negative sentiment indicators, raising the specter of stagflation.
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Consumer spending unexpectedly dropped 0.2% in January, the largest decrease since February 2021, despite rising incomes. This decline, potentially fueled by economic uncertainty stemming from tariff threats and potential government job cuts, contrasts with cooling inflation (2.5% year-over-year). However, the proposed tariffs on imports from Canada, Mexico, and China are expected to increase prices, potentially offsetting this positive trend. Businesses are already planning price increases and job cuts in response.
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December’s Job Openings and Labor Turnover Survey revealed a decrease in job openings to 7.6 million, a decline of 556,000, despite steady hiring and quit rates. This drop, concentrated in professional and business services, education, and finance, lowered the job openings-to-worker ratio to 1.1:1. While layoffs remained relatively low, the overall data suggests a cooling labor market, impacting upcoming Federal Reserve policy decisions.
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California’s unemployment rate is now the highest in the country, and as a resident of this state, I can feel the impact firsthand. Looking at the data provided, it’s evident that farm labor is a significant driver of this increase, along with the struggling real estate sector. As someone in the tech industry, I can relate to the feeling of impending doom as layoffs continue to plague the sector. The excessive hiring practices of tech companies aiming to boost executive profiles are now hurting profits, resulting in a wave of job losses.
The discrepancy in jobs reports is surprising, with initially reported job gains being adjusted to a much lower number.… Continue reading
Matt Underwood 
John Q. Hosedrinker