The US economic growth rate continues to slow down! The "layoff wave" spreads to the retail industry

It is learned that due to the impact of the Federal Reserve's interest rate hike on economic growth, layoffs in economic sectors outside the US technology industry are increasing, and the main industries affected include manufacturing and retail.

In the retail sector, Hudson's Bay-owned discount retailer SaksOFF5th announced on January 24 that it was laying off an undisclosed number of employees, while Saks.com laid off approximately 100 employees, accounting for 3.5% of its total workforce.

Wayfair, the furniture and home goods e-commerce provider, has announced that it will lay off 1,750 employees, or 10% of its workforce.

On January 26, toy and board game company Hasbro Inc. announced restructuring layoffs that include cutting 15% of its workforce, or about 1,000 employees. Hasbro's CEO said in a statement that the layoffs are necessary to achieve cost savings of $250 to $300 million over the next three years.

The gross domestic product (GDP) report released by the U.S. Department of Commerce on January 26 showed that the annualized economic growth rate in the fourth quarter of 2022 was 2.9%, lower than the 3.2% growth rate in the third quarter.

However, the Commerce Department also reported that consumer spending fell 0.2% in December from the previous month, seasonally adjusted.

The consumer spending report showed households cut spending on goods as prices for gasoline and other energy products fell. On the other hand, consumers increased spending on services as prices rose.

Efraim Benmelech, a professor of finance at Northwestern University, explained the decline by noting that the Fed's actions led to a drop in consumption. Rising interest rates made mortgages more expensive, leading to less spending on appliances, paint and other home improvement items.

Editor✎ Ashley/

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