[Source: CNN]

Two years ago, when the pandemic ushered in the sharpest economic downturn on record, it sparked a tidal wave of layoffs.

The subsequent recession was painful but mercifully short — technically, it lasted only two months. Since then, the economy has come roaring back. Unemployment in the US is near its lowest level in 50 years, and consumer spending has so far withstood historic inflation, keeping the economy afloat.

But over the past week, a spate of layoffs has added to investors’ fears that the wheels may be coming off.

On Wednesday, two US real estate companies that flourished in the pandemic era of low mortgage rates and ravenous demand, announced layoffs. Redfin (RDFN), which went on a hiring binge in recent years and employed nearly 6,500 people as of December, is cutting 8% of its staff.

Redfin’s stock is down 80% this year. Meanwhile Compass, which employs 4,500 people, is axing 10% of its staff, citing “clear signals of slowing economic growth.”

The layoffs didn’t stop with housing. The whiplash in hiring is hitting tech and crypto hard. On Tuesday, crypto platform Coinbase abruptly laid off 18% of its staff, froze hiring and even rescinded job offers.

CEO Brian Armstrong pointed to a possible recession looming and growth that happened “too quickly.”

Spotify plans to reduce hiring by 25%, according to Reuters. On the retail side, StichFix and Carvana are also making cuts.

And on Thursday, Elon Musk told Twitter (TWTR) employees the company “needs to get healthy” financially, suggesting job cuts could follow if his bid to acquire it goes through. That came just two weeks after Reuters obtained an email from Musk saying he wanted to lay off 10% of Tesla’s salaried staff because the CEO has a “super bad feeling” about the economy.

Step back: While all of those layoffs are painful and may trigger unwelcome flashbacks to the spring of 2020, it’s still too early to know whether they’re a harbinger of broader turmoil.

Sojourner is in a unique position to know. Back in March 2020, he and fellow economist Paul Goldsmith-Pinkham were among the first to accurately predict the first avalanche of nearly 3.5 million layoffs in a single week — that was nearly three times the estimate offered by Goldman Sachs.

So far, he doesn’t see evidence of a broad pattern to suggest the strong labor market is going slack. That’s not a promise it won’t change, he says, but he’s still optimistic.

He’d caution bearish observers to keep in mind that a lot of our economic problems stem from things being too good.

“People are complaining that consumers have too much money, they’re spending too much and driving up prices … Everybody’s working who wants to be working,” he says. “These are very high-class problems.”