Consumer spending data gives a different perspective on the jobs market.
While the economy added a better-than-expected 311,000 jobs in February, credit- and debit-card data from Bank of America shows people kept on spending at a strong clip during the month.
Consumers’ willingness to spend is closely tied to their employment situation, and a person who’s out of work or worried about their job prospects are obviously more likely to cut back on their spending.The February jobs report on Friday comes after a major 504,000 addition to payrolls in January, revised back from 517,000 jobs. And that’s even with the steady drumbeat of more tech sector layoffs. Some observers wonder how much longer the labor market can keep it up.
“Strong labor markets” are boosting consumer spending and any impact from tech-sector job cuts is “modest,” researchers wrote in a Thursday report.The backdrop is the very visible layoffs in a list of companies that includes Twilio TWLO , DocuSign DOCU , Salesforce Inc. CRM , Zoom Video Communications ZM , eBay Inc. EBAY , Spotify Technology SPOT , Google parent Alphabet Inc GOOG . and more.
The types of industries that fall under this category include newspaper publishers, software publishers, radio broadcasting, media streaming, social-media networks and web-search portals, according to a Bureau of Labor Statistics spokesman. Researchers looked closer at information from households making at least $125,000 a year, because tech-sector workers may tend to earn more, they said. There was a time in mid-2022 when these accounts were spending at a slightly greater rate than accounts below that level.
It’s entirely possible that laid-off tech-sector workers are quickly finding work by taking their talents to new industries. But nor does that mean that losing a job and landing a new one is an easy or low stress process.
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