It's monetary policy tightening (effective rate 0% -> ~5%), not government spending. There is no recession, just normalization (zero interest rate policy, or ZIRP, was an abnormality). Unemployment is close to lowest levels in history because of structural demographics. When money gets more expensive, you must perform, adapt, or die as a business. Cashflow is king, and profits juiced from government stimulus mentioned is simply evaporating as the Fed drains money out of the system.
Businesses are attempting to discover how to operate in a macro that makes labor and money more expensive than they've been accustomed to over the last 15-20 years. u/DoughnutHole touches on another important point: businesses and capital are clinging to returns that might no longer be obtainable in this new macro (as we've been papering over reality with cheap credit and financialization for some time). What is going to break first? Who knows, first time we're someplace like this. Everyone is going to fight like hell to defend their piece of the pie (note the broad layoffs and back to hiring shortly after, as well as activist investors demanding trimming labor costs aggressively).
https://fred.stlouisfed.org/series/FEDFUNDS (Pick 10Y time scale)
https://fred.stlouisfed.org/series/WM2NS
https://www.goldmansachs.com/intelligence/pages/why-the-us-m...
https://fedinprint.org/item/fedkeb/96953 | https://www.kansascityfed.org/Economic%20Bulletin/documents/... ("The labor market has so far shown remarkable resilience to the Federal Reserve’s recent monetary policy tightening. Severe labor shortages in the post-pandemic era have led many employers to hold on to workers and hire less-skilled workers—even though they expect demand for their goods or services to weaken in the future. As a result, unemployment remains low, and labor productivity has declined.")