Former Home Depot CEO Bob Nardelli Warns Of 'Tremendous Shift' In Labor Market, Predicts No Soft Landing For US Economy

Former Home Depot Inc. CEO Bob Nardelli has raised concerns about the ongoing economic pressures and the potential for a significant shift in the labor market.

What Happened: Nardelli, pointed out that the U.S. economy is not showing signs of a swift recovery. He highlighted the impact of rising inflation and the possibility of widespread layoffs, in an interview with Fox Business’ “Cavuto: Coast to Coast” on Monday.

He emphasized that the causes of inflation are rooted in raw materials, transportation, and energy, as well as wage increases. Nardelli also noted a significant shift in employment, with a growing number of layoffs across various sectors.

“We’re now seeing people being laid off,” Nardelli said, “If you look at chips, they’ve laid off almost 40,000 people. We’re seeing a tremendous shift in employment out there where people are being laid off.”

Several major companies, including Cisco, Snap, Estée Lauder, Amazon, Citigroup, and UPS, have recently announced layoffs amid market volatility.

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Despite a 136% increase in layoffs in January, the pace of job cuts by U.S. employers is still about 20% lower than the previous year. However, Nardelli predicts that the U.S. is still in an inflationary period and may not experience a soft landing.

“Ford laid people off because of EV[s]. GM laid people off because of the cruise program. We’re just seeing Stellantis lay people off because of the UAW wage increase,” Nardelli said. “So no, I think we’re still in an inflationary period. I think we’re not going to see a soft landing would be my prediction, but I hope I’m wrong.”

Why It Matters: Nardelli’s warning comes at a time when the U.S. economy is grappling with a series of challenges. The labor market has been undergoing a significant transformation, with companies restructuring their workforces to invest in new technologies like AI.

Despite a slight dip in January, the U.S. inflation rate remains high, challenging the Federal Reserve’s plans for rate cuts. Economists have expressed concerns about the persistent inflationary pressures, which could necessitate further rate hikes.

In April, Nardelli had also warned about the complexity of the U.S. economy and the potential for a wave of bankruptcies. His recent comments underscore the ongoing challenges facing the U.S. economy and the need for a comprehensive strategy to address these issues.

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