Goldman sees big layoff announcements as 'a ripple, not a wave'

The rash of large layoffs at tech companies are not representative of a major breach in the labor market, according to Goldman Sachs.

Recent headlines around companies such as Yahoo, Google, Microsoft and others have jangled nerves as worries linger over whether the U.S. is heading into a recession. However, Goldman economists this week say they see a solid labor market and, in fact, less of a chance that the economy will contract over the next year. "We expect the recent round of corporate layoffs to be a ripple, not a wave," Goldman said in a recent client note.

On top of that, weekly jobless claims have held low, running below 200,000 for the past four weeks, despite the big headlines about layoffs. Worker mobility also remains solid, with quits holding at 2.7% of the workforce in December and the hiring rate actually increasing to 4% for the month, according to Labor Market data.

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