Ford Motor Co. will lay off about 3,000 employees, the company confirmed to the Wall Street Journal on Friday, representing one of the largest corporate layoffs this summer as major U.S. companies fear a possible recession.
Many experts warned the U.S. may be headed toward recession following reports the economy contracted 1.6% in the first quarter of the year. Those fears were reignited following Federal Reserve’s announcement in June to raise interest rates by 75 basis points, its largest rate hike in 28 years. After the rate hike — the first of two from the Federal Reserve this summer — economists at S&P Global Ratings forecast a 2.4% drop in GDP by year’s end, a reverse in course from earlier forecasts of 2.4% growth. Bank of America issued a warning last month that “economic momentum has faded,” and a “mild recession” is possible by the end of the year. Then, over the past month, warning signs seemed to be tapering off. The latest report from the Bureau of Labor Statistics revealed an 8.5% spike in inflation from last July, a sign that the Federal Reserve’s interest rate hikes could be cooling inflation, one month after a 9.1% year-over-year spike in June. House Democrats last week passed an ambitious piece of legislation, after hours of debate, aimed at curbing inflation, sending the $437 billion Inflation Reduction Act to President Joe Biden, who signed it on Monday.
In an interview with the Washington Post last month, U.S. Deputy Secretary of Labor Julie Su said she was optimistic the economy will rebound, citing 9 million jobs created since President Joe Biden took office, and 372,000 new jobs in June. Last week, however, unemployment claims reported by the Department of Labor jumped to a nine-month high, with roughly 262,000 people filed initial jobless claims.