Do you know anyone getting laid off? We’re hearing lots of second-hand reports. Things such as:
- My daughter got laid off.
- My son-in-law’s company just cut staffing 20 percent. He kept his job but is worried he might be in the next wave.
- My boyfriend can’t get overtime any more.
- There’s a hiring freeze at the plant.
- The parking lot over at the Amazon warehouse is only a third full.
The good news is it’s always someone else who got laid off, but that’s coming in the next couple months. Of course, it may also be because we’re not working and many of the people we know are retired. The news is full of layoffs, including those at the big tech companies like Meta, Lyft, and Stripe. Amazon and Apple have both instituted hiring freezes.
Layoffs are a symptom of a declining economy, and more are coming.
We’re seeing lots of news coverage about the diesel shortage, both in the mainstream and alternative media. That’s bad for the economy, but it will also sideline drivers and if goods can’t get delivered, warehouses will cut staffing levels.
A diesel shortage could also ruin Christmas. Many of the delivery vehicles bringing mail-order packages run on diesel, both for long hauls and the last mile to your doorstep.
I’ve seen some people who doubt there is a diesel shortage and others who claim it is real, but created by the Biden Administration. My take is that the shortage of diesel fuel is real in some parts of the country where there is not enough refinery capacity. I doubt the president created the fuel shortage on purpose, but I believe his politics and policies have contributed to its existence. He certainly has done nothing to prevent it or to encourage production of more oil and energy. His green energy policies and anti-fossil fuel stance have been cited multiple times when oil companies say they won’t invest in new capacity.
Heating oil is very similar to diesel and there’s a looming shortage that is driving up prices as we head into the heating season. New England may run out of diesel, home heating oil, and natural gas this winter. Hope you have a wood stove.
Consumer Spending Remains Strong
So far, consumers seem to be spending plenty of money, which sounds good for the economy, but it depends on why they are spending money. Are they spending on food, clothing, and gas or are they spending it on discretionary items such as new furniture, upgrading appliances and buying RVs and boats? If prices are 30 percent higher, then of course people are spending more than last year. Remember, inflation sends all prices up.
According to a recent article in the Wall Street Journal, “Seventy-two percent of consumers plan to look for less expensive alternatives this holiday season because of inflation, according to a survey of 2,200 U.S. adults by Morning Consult, a research company.” The same article reported that consumer spending slowed this summer and that spending on luxury goods also slowed.
Here’s an example from my own life. The other day, we went to a food truck roundup. I could have had a lobster roll for $18 or a beef empanada for $6. I chose the latter due to high the price for the lobster roll.
Once enough people make cuts like this in their personal life, consumer spending will slow.