Are we in a recession? Because if we are, it’s weird.
Of course, we’ve had two-quarters of negative economic growth. Demand for manufacturing is declining. Activity in the construction and housing markets has slowed. Tech companies are contracting. Financial services and real estate firms are laying people off. Inflation and energy costs remain stubborn, interest rates are rising and the stock market is down 18 percent since the start of the year. Just Google “recession” and you’ll find the housing market is synonymous, major banks and investors are warning of one, and Europe is headed for one. More than 80 financial advisers say a recession is “coming” and believe one big investor will be “embarrassed”.
But wait a moment.
Maybe we’re in a recession. Or maybe it’s coming. But when there’s failure—or the prospect of one—companies fire people. That’s not happening, is it? Employment continues to grow. The unemployment rate remains at a historic low. Job vacancies are near an all-time high. And here’s the real shocker: Most small businesses in the United States — which employ more than half of the nation’s workforce — are struggling not only to hire, but to find workers, according to the latest survey results from the National Federation of Small Business Owners. Freelance business and employment information from HR firm Paychex.
“Small businesses are still not showing strong signs of recession,” Paychex’s CEO told CNBC last week.
So why do businesses — especially small businesses — want to lay off employees instead?
First, it’s getting harder and harder to generalize the U.S. economy. There are 350 million people and 30 million small businesses in this country. Our economy is still 60% larger than China’s and larger than Japan, Germany, England, France and Italy combined. California’s economy is bigger than India’s. New York’s economy is bigger than Canada’s.
You cannot say, “We are in a recession.”
At any given time in the US, some industries and regions are doing better than others. Construction, financial services and manufacturing are struggling. So does the energy industry. But it is given Profit of work Since the pandemic, business services, retail, transportation and warehousing have been rocked. The leisure and hospitality industry has lost the most jobs of any industry since the pandemic, but it appears to be bouncing back. Alaska, New Mexico, New York and Pennsylvania, for example, have unemployment rates higher than the national average, while states such as Minnesota, Florida and North Dakota have recorded very low unemployment rates. When her biggest employer struggles, the city struggles with her. But the opposite is true.
So is the United States in a “recession”? Judging from the above, the answer depends on who you ask.
Another reason why most small businesses want to hire is because most small business owners are not stupid. Democrats do Tell us We know that there have been historic achievements in the last two years, but because of the epidemic, the bar has been set at zero. Republicans warn of recession and hyperinflation, but we know that these things are caused by many factors — European wars, Asian supply chains, and fiscal and monetary policies here in the U.S. — and we know that these factors will eventually resolve themselves, though perhaps not as quickly or as quickly as we would like. . We will not be fooled by politicians or speeches. We are living this reality every day. And our reality is that – for the most part – demand remains relatively strong.
And if there’s one thing I’ve learned, it’s that my smartest clients, those business owners who have been doing what I’ve been doing for decades, even generations, are always looking ahead. At the moment, they are not thinking too much about 2022 or the first half of 2023. They are planning and investing for 2024 and beyond. They know that there are people who depend on them for their livelihood – customers, partners, employees (and their families). They don’t see giant bubbles and economic ruin on the horizon like I do. Of course we were wrong. But now we are betting on the future.
And we still know that people are our most valuable asset. Of course, many companies are replacing low-skilled workers with robots and automation. But there is no substitute for a skilled worker at their job. Whether we’re in a recession or not, find me someone like that and I’m going to hire that person. If handled well, I know that person will add long-term profits to my company regardless of the short-term investment.
So no, we are not in a recession. And yes, we are in a recession. And no, we are not hiring. But yes, we are. You can do it in any way. That’s what people are doing. They are correct. You are wrong. They argued. In the meantime, small businesses in strong industries or growing geographic regions will continue to hire. And even the ones that aren’t don’t get the chance to invest in good people when things finally turn around.