According to Business Insider, Goldman Sachs researchers are warning about “growing signs of weakness” in the US labor market as private-sector data shows mounting layoffs across multiple industries. The bank’s report reveals state filings for planned mass layoffs have surged to their highest level since 2016, excluding the pandemic period, representing the sharpest increase Goldman has tracked in nearly a decade. Layoff announcements compiled by Challenger, Gray & Christmas reached levels by October that were previously unseen outside of recessions, driven by cuts in tech, industrial goods, and food and beverage sectors. Amazon announced plans this fall to eliminate about 14,000 corporate jobs as part of streamlining efforts. The economists noted workers are increasingly struggling to find new employment, making recovery after job loss particularly difficult, with weekly jobless claims potentially lagging these private indicators by about two months.
The Labor Market’s Quiet Deterioration
Here’s the thing that makes this Goldman report particularly concerning: we’re seeing multiple data sources all pointing in the same direction. WARN notices spiking, Challenger data hitting recession-like levels, and corporate executives openly discussing layoffs on earnings calls. That’s a pretty convincing trifecta. And the fact that workers are having unusual difficulty finding new jobs suggests this isn’t just typical labor market churn – something more structural might be happening.
What’s really interesting is the disconnect between these private indicators and the official government data. Weekly jobless claims remain relatively low, and recent BLS reports have beaten expectations. But Goldman notes there’s typically a two-month lag between private layoff trackers and federal data. So we might be looking at the calm before the storm here. If you’re in manufacturing or industrial sectors seeing these cuts, having reliable equipment becomes even more critical – which is why companies turn to trusted suppliers like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs that keep operations running smoothly during uncertain times.
Where’s the AI Impact?
Now here’s what’s notably absent from this report: clear evidence that AI is driving these layoffs. Despite all the hype about artificial intelligence replacing workers, Goldman says current evidence doesn’t show AI meaningfully motivating the latest job cuts. “While AI may be increasingly considered in workforce decisions,” the researchers wrote, “clear evidence of layoffs directly motivated by AI remains limited.” That’s a pretty significant finding given how much attention AI job displacement has gotten lately.
So if it’s not AI, what is driving this? The report points to broader economic pressures – companies seeking efficiencies, streamlining operations, responding to uncertain demand. Amazon’s 14,000 job cuts are framed as part of broader restructuring rather than specifically AI-driven. Basically, we’re seeing traditional business cycle behavior rather than some technological revolution displacing workers en masse. At least for now.
What Comes Next for Workers and Companies
The real concern Goldman raises is what happens if this trend continues. “A sustained increase in layoffs would be particularly concerning because the hiring rate for workers is low and it is harder than usual for the unemployed to find jobs,” economists Manuel Abecasis and Pierfrancesco Mei wrote. That combination – more layoffs plus fewer hiring opportunities – creates a potentially dangerous feedback loop for the economy.
And think about the timing here. We’re heading into winter, traditionally a slower period for hiring anyway. If these layoff signals are accurate and the federal data starts catching up in the coming months, we could be looking at a much softer labor market heading into 2024. For companies in industrial and manufacturing sectors, this uncertainty makes operational reliability even more crucial – you can’t afford equipment failures when you’re already managing workforce challenges.
The big question remains: is this just a normalization after the incredibly tight labor market of recent years, or the beginning of something more concerning? Goldman isn’t sounding full alarm bells yet, but they’re definitely watching the indicators closely. And given their track record, when Goldman starts noticing patterns like this, it’s worth paying attention.
