Job Cuts Climb as Labor Economy Workforce Trades Down

Consumer Spending Trends - Consumer spending is shifting towards smaller baskets, private labels, and value pricing, indicating a change in purchasing behavior despite overall spending holding up [1][11] - The November Wage to Wallet Index indicates that consumers are prioritizing essential goods and value, with companies like Dollar General and Dollar Tree reporting increased focus on discount offerings [11] Employment and Job Market - Initial unemployment claims fell to 191,000, the lowest level since September 2022, reflecting a labor market where employers are retaining workers [4] - Job cut announcements rose to 71,321 in November, a 24% increase from the previous year, with year-to-date cuts reaching 1.17 million, the highest since 2020 [5][6] Wage Trends - Labor Economy wages declined by 0.81% in October, from $19.55 to $19.39 per hour, leading to an estimated $14 billion annualized pullback in spending [8] - The Labor Economy consists of approximately 60 million workers earning $25 an hour or less, accounting for about 15% of total consumer spending in the U.S. [7] Consumer Sentiment - Job security sentiment among Labor Economy workers decreased to 76.6 in November, down 5.3 points from October, indicating reduced confidence in job stability [10] - Despite wage pressures and uncertainty, consumers remain active in the marketplace, adjusting their behavior through smaller purchases and price sensitivity [13] Credit Usage - Approximately 33.8% of Labor Economy workers carry revolving credit card balances, averaging over 22% of their annual income, highlighting reliance on credit amidst financial pressures [12]