Has America Gone Vegetarian?

I predict the next Fed meeting will result in a rate cut. Why is that? Well, because the employment numbers are heavily skewed. In fact, they are also incredibly weak. We previously saw only 12,000 jobs created in the month of October. When you subtract the 40,000 government jobs created, that means the private sector actually lost 28,000 jobs. Not only that, those 40,000 jobs could have been largely associated with the US election which concluded on Nov 5. The work to certify the election continued of course beyond Nov 5. But the election is an event that has a surge in hiring. 

In total there are somewhere between 700,000 and 900,000 people involved in the election process at both the federal and the state level. Now that the election is over, those jobs are gone at least for another 2 years. So the strength in the employment market in the past two months, which was not that strong at all is actually much weaker than it seems when you back the government hiring out of the equation and the election related hiring out of the equation. 

We are seeing a large number of executive changes across multiple industries. There have been over 216 CEO changes announced at public companies across the US in the last short while. In times of stress the new incoming CEO will likely make their mark by conducting a strategic review. That process usually results in trimming fat in the organization. All of these companies are going to be shrinking into greatness in the short term. That means layoffs. 

Companies bloated with hiring during the pandemic as prices rose and  the revenue associated with those higher prices enabled businesses to afford the extra staff. Those days are long gone. Most major businesses have a hiring freeze and of course the layoff announcements continue. Cargill is laying off 5% of its staff or about 8,200 workers. Tyson meats is laying off 800. All of these layoffs are indicative of the population at large struggling to make ends meet. If the two largest suppliers of animal protein are seeing falling revenue, it’s because people can’t afford to buy meat as much as they might have in the past. I don’t think they’ve all suddenly become vegetarian. 

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