Why Are Layoffs Rising and Manufacturing Weakening?

Understanding the Real State of the U.S. Economy

Recent economic data paints a troubling picture, and it’s becoming harder to explain away. Layoff announcements in the United States have now topped 1.17 million for the year, the highest level since the COVID pandemic. As of November, U.S. employers have announced more job cuts than at any point in recent years outside of an outright crisis. That alone should command attention.

At the same time, U.S. manufacturing has contracted for nine consecutive months, according to the latest ISM data. Factories are producing less, hiring less, and facing continued pressure from higher costs. Tariffs, government shutdown disruptions, and increased global uncertainty are all cited as contributing factors. Business conditions, in plain terms, remain soft.

These are not isolated data points. They are connected. And they reflect exactly what many analysts warned would happen under policies that raise costs, disrupt supply chains, and inject uncertainty into business planning.

When Warnings Become Reality

There’s no satisfaction in being right about economic slowdowns. Rising layoffs and weakening manufacturing don’t score political points—they affect real people, families, and communities. Workers lose jobs. Businesses delay investment. Confidence erodes. That’s not an abstract problem; it’s something felt on Main Street long before it shows up in official reports.

What’s concerning is not just the data itself, but the growing gap between economic reality and official messaging. While layoffs rise and factories struggle, public reassurances continue to suggest that everything is fine—or that it will magically improve with the turn of the calendar.

Blaming one-off events, such as temporary shutdowns or isolated political battles, doesn’t explain sustained trends. A million-plus layoffs over the course of a year and nearly a full year of manufacturing contraction point to something more structural.

Perception vs. Reality

Polling reflects this disconnect. Only a small percentage of Americans describe the economy as “excellent.” A growing share view conditions as fair or outright poor. Regardless of political affiliation, people tend to judge the economy by what they see around them: job security, prices, business activity, and opportunity.

Telling people that conditions are strong while they’re watching layoffs rise and hiring slow doesn’t build confidence—it undermines it. Repeating positive talking points doesn’t change balance sheets, payroll decisions, or order books.

There’s an old saying that “the beatings will stop when morale improves.” Applied to economic messaging, it captures the frustration many feel today. Confidence isn’t restored by insisting everything is great; it’s restored when policies begin producing measurable improvement.

Why Policy Signals Matter

Businesses don’t operate on optimism alone. They respond to costs, demand, and clarity. Tariffs that raise input prices squeeze margins. Uncertainty about trade, taxes, or government funding makes it harder to hire people and invest money. Over time, caution turns into fear.

Manufacturers cutting back for nine straight months aren’t making emotional decisions—they’re responding to economic conditions. Layoffs on this scale don’t happen because executives are pessimistic; they happen because revenues, costs, and forecasts no longer support existing staffing levels.

This is why acknowledging reality matters. Without honest assessment, course correction doesn’t happen.

The Investor Perspective

At Markowski Investments, this kind of environment reinforces a core belief: successful financial decision-making starts with truth, not narratives. Whether managing a household budget, a business, or a national economy, pretending problems don’t exist only increases the eventual cost of addressing them.

Markets, like economies, ultimately respond to fundamentals. Employment trends, production data, and business confidence matter far more than press releases. Investors who understand this focus on discipline, risk management, and long-term planning—especially when economic signals turn mixed or negative.

Looking Forward

There is still room for improvement. Policy adjustments can reduce uncertainty. Clearer signals can encourage investment. But progress begins with acknowledging what the data is already saying.

Layoffs at their highest level since the pandemic and prolonged manufacturing contraction are not signs of a healthy economy on autopilot. They are warning lights. Ignoring them doesn’t make them go away—it just delays the response.

For families, businesses, and investors alike, realism isn’t pessimism. It’s preparation. And in uncertain times, preparation is what ultimately protects both opportunity and wealth.