Hot job market and Great Resignation persist despite recession threat

Hot job market and Great Resignation persist despite recession threat

Staff are nonetheless reaping the advantages of a scorching labor market characterised by few layoffs, ample job openings and a excessive stage of voluntary departures, in keeping with U.S. Division of Labor knowledge issued Wednesday.

The numbers reveal that the pandemic-era development often called the Great Resignation continues to be in full swing despite fears of a U.S. recession, although it’s exhibiting some indicators of leveling off, labor economists stated.

“Overall, this doesn’t look like a job market about to tip into recession,” stated Daniel Zhao, a senior economist at profession web site Glassdoor. “Labor demand is still extremely hot, and even if things are cooling from white-hot, they’re still red-hot.

“I believe the query on everybody’s thoughts, although, is that if this may proceed,” Zhao added.

Job openings and ‘quits’ near record highs

There were nearly 11.3 million job openings on the last business day of May, the Labor Department reported Wednesday.

Job openings — a proxy for employers’ demand for labor — are down from about 11.7 million in April and a record 11.9 million in March. But they are still elevated in historical terms and hovering near their level of late 2021.

Additionally, workers have been quitting their jobs at a near record pace. About 4.3 million people voluntarily left their jobs in May, about the same as in the previous month and down only slightly from their peak of more than 4.4 million in March.

“The quits price was doing 100 [miles per hour] on the freeway; it slowed down however it’s nonetheless doing 90,” said Nick Bunker, an economist at job site Indeed. “It is nonetheless fairly fast, simply not as quick because it was.”

This Great Resignation development has been a centerpiece of the labor market since early 2021. It is even entered the zeitgeist via so-called “QuitToks” on social media site TikTok and in a Beyonce song released last month.

For the most part, workers are shifting to better jobs, lured by factors like higher pay, according to economists. Wages in May jumped by 6.1% versus a year earlier, the biggest annual increase in more than 25 years, according to the Federal Reserve Financial institution of Atlanta.

Historically low layoff rates continue

Layoffs were also near record lows in May. The layoff rate — which measures layoffs during the month as a percent of total employment — was unchanged at 0.9% in May, the Labor Department said Wednesday.

Before the pandemic, 1.1% was the country’s lowest layoff rate. But May marked the 15th straight month in which layoffs were below that pre-pandemic record — an indication that employers are holding on to their existing workers, Bunker said.

Meanwhile, the unemployment rate of 3.6% is near the pre-pandemic level in early 2020, when it was 3.5%. That was the lowest jobless rate since 1969.

“It is nonetheless a job seeker’s labor market,” Bunker said. “Staff nonetheless have numerous bargaining energy.

“They maybe lost a little leverage from a couple months ago, but we haven’t seen a significant change there yet.”

Slowdown could also be forward

Whereas the labor market has been a shiny spot of the pandemic-era financial restoration, there are indications issues might cool — although it is unclear how a lot and how rapidly, economists stated.

The Federal Reserve is elevating borrowing prices for customers and companies in a bid to sluggish the financial system and tame stubbornly excessive inflation. What’s extra, the newest inflation studying got here in hotter than anticipated, and the newest retail gross sales knowledge was weaker than anticipated, Glassdoor’s Zhao stated.

“We know quite explicitly the Federal Reserve is trying to cool down the economy,” Zhao stated. “One of the places that’s going to happen is in the labor market.

“Issues would possibly decelerate because the labor market cools, however for proper now we’re nonetheless very a lot within the Great Resignation,” he added.

Source link

Uber, DoorDash, Coinbase and more Previous post Uber, DoorDash, Coinbase and more
GameStop jumps in extended trading after announcing 4-for-1 stock split Next post GameStop jumps in extended trading after announcing 4-for-1 stock split