Could The Labor Market be Impacted
by Brics in Q4-2023?
On Sept 6 Russia and Saudi Arabia have announced their intention to roll over their oil production cuts to the tune of 1.3 million bpd till the end of the year, when supply is already predicted to remain tight.
This decision is sparking some discussions on its potential effects on the inflation rate.
What about the labor market?
Looking at 2022, there is an observable trend where layoffs and discharges began to trend upward around May, and peaking in August. This uptick in layoffs and discharges correlates with the period of rapidly rising inflation.
Inflation pushes up operational costs through raw materials and services. If companies can’t pass those onto consumers, margins decrease. As cost cutting measures become necessary, HR slows down hiring and starts laying people off. And since the government is already hinting at the return of mask mandates, could we be plunged again into a 2020-like lockdown situation, with even more devastating consequences for the economy? Let’s not just jump to Doomsday conclusions, however. If there is a risk that the job market slows down in Q4, layoffs won’t hit across the board anytime soon. In our opinion, they would impact the entry- to mid-level work force, while key executives and technical or specialized roles will remain in demand and relatively unaffected. Also, top sales producers create their own job stability with their numbers so they should be safe too.
