Episode summary
US Layoff Plans Ease, But Still Most for November Since 2022
Bloomberg Surveillance
· · Guests: Erin McLaughlin, Andy Challenger
Summary
Consumer confidence is still being weighed down by expectations for the labor market, with the guest saying future expectations for six months ahead are “very dismal” and at their lowest point since April, when consumers were worried about tariffs. Even so, spending has not cracked yet: the guest pointed to solid retail results, including a 4% rise in Black Friday sales, and said economists have not declared the holiday season a success yet.
The guest argued that corporations remain stuck in uncertainty, especially around tariffs and the future of trade with China, Mexico and Canada. In the guest’s view, companies are absorbing some tariff costs in margins and waiting for clearer policy signals before making bigger supply-chain decisions, which helps explain why onshoring and manufacturing gains have not materialized. Manufacturing spending is down 4% this year after several years of double-digit growth, and manufacturing remains in contraction.
The discussion also turned to traffic and infrastructure. The guest said adding lanes is not the answer and that congestion pricing may be one tool that works. But the broader infrastructure debate, the guest said, has shifted away from roads and transit toward the electric grid, leaving transportation issues on the back burner.
Key takeaways
- The guest said consumer six-month expectations are at their lowest point since April because people are worried about prices, inflation, tariffs and employment.
- Despite weaker sentiment, the guest noted Black Friday sales were up 4% and retailers like Dollar General are still posting solid numbers.
- The guest argued companies are absorbing tariff costs in margins and waiting on trade decisions before reshaping supply chains.
- Manufacturing spending is down 4% this year, and the guest said the hoped-for onshoring response to tariffs has not shown up.
- The guest said congestion pricing may help traffic, while adding lanes would only create more congestion.
Notable quotes
“their future expectation for six months ahead continues to be very dismal”
“we decided not to declare the holiday season a success yet. Okay, let's wait”
“companies themselves, I mean, they're raising prices a little bit. We hear that on the calls, but they're absorbing some of it and they're waiting to see what happens”
“manufacturing spending is down 4% after growing double digits for the last few years”
“the solution is probably some form of congestion pricing that may take off in other cities”
How the episode opens
Well, at the Conference Board, we have our consumer confidence index. And a big component of that is sort of the expectation for consumers regarding the labor market. And what we're finding is their future expectation for six months ahead continues to be very dismal.
You know, in overall expectations are sort of at their lowest point. And again, this is the survey was last month, but in in late November, but the lowest point since April when consumers were worried about tariffs. So consumers are still concerned about prices, inflation, tariffs, but they're also concerned with their employment.
And when they feel like their employment could be compromised, we know that they tend to maybe rein in their spending a little bit, but we see consumer spending still pretty good. I mean, we get the dollar. Dollar General came out some good numbers today.
The other retailers putting up some pretty solid numbers, it looks like. I mean, Black Friday sales were up 4%. It seems like the consumers are still out there spending, though.
Yeah, we had our forecast meeting earlier this week where all of us economists get together and talk about these things. And we decided not to declare the holiday season a success yet. Okay, let's wait.
Let's see how the rest of the next couple of weeks go before we declare, you know, a success. You have your pulse on corporations. I mean, it's a summer here.
Online grows in the first and second derivatives. It just reigns supreme. You know, I think for companies it's just continuously about uncertainty.
And all of their decision making is. Really compromised right now by not knowing what the future of our listeners. Paul, you say it.
We get back to back quarters of double digit earnings growth.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us layoffs
- interest rate expectations
- federal reserve policy debate
- hiring intentions down
- telecom sector layoffs
Companies and tickers mentioned
- VZ
- The Conference Board
- Challenger, Gray & Christmas
- Verizon Communications Inc.
Watch the episode
Watch “US Layoff Plans Ease, But Still Most for November Since 2022” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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