Job Offers Rescinded (Reminder of Past Financial Downturns)
Sorry – your services will not be needed after all.
In a nutshell, that’s the message increasing numbers of the newly hired are receiving.
Here’s a Feb. 22 headline from the Los Angeles Times:
People are losing jobs before they even start, throwing lives into chaos
Rescinded job offers were more common during the dot.com bust of 2000 and the 2007-2009 financial crisis.
Perhaps a financial downturn is unfolding which is on par (or worse) with those two episodes.
Here’s a perspective from the February Elliott Wave Financial Forecast (commentary below the chart):
The steep decline shown on this chart is the year-over-year change in temp help hiring. In December, the yearly change went negative for the first time since the aftermath of the recession of 2020. Negative readings on this indicator foreshadowed all three of the most recent recessions. There was one false signal, a brief negative reading in 2016. But that episode saw little in the way of an accompanying bear market, so the current case is more like those of 2000, 2007 and 2020.
Economists view the temp sector “as an early warning indicator,” although Bloomberg reports that many now say “a plausible interpretation is that temp work is simply normalizing” in the wake of pandemic-related hiring quirks. But the modern equivalent of the help-wanted advertising index suggests the current hiring freeze is more than temporary. Long-time readers will recall that years ago, help-wanted ads were a very dependable harbinger of economic change. In December 2007, when help-wanted advertising was still a thing and Monster.com was the top Internet site for job postings, [The Elliott Wave Financial Forecast] cited sharp declines in both areas and stated they signaled that “a recession is at hand.” The biggest economic contraction since the Great Depression was in fact already underway.