The labor market remains stronger than expected despite lingering recession fears and seemingly constant news of massive layoffs.
Job postings hit 10.7 million in September, according to the Department of Labor’s latest job postings and turnover survey, following a drop in August that economists said could trigger a slowdown in the labor market. labor market.
Other figures in the report show signs of stabilization between hiring demand and available workers: new hires fell slightly to 6.1 million (from 6.3 million) and quits fell to 4.1 million (against 4.2 million). Layoffs remain historically low at 1.3 million, or less than 1% of the workforce. But there are still nearly two job openings for every available worker.
However, some industries are seeing surprising declines in employment, and that’s enough to worry job seekers and workers alike, Julia Pollak, ZipRecruiter’s chief economist, told CNBC Make It.
The tale of two labor markets
Pollak says diving into the jobs of each industry is like looking at the story of two labor markets.
For one thing, the healthcare industry is “growing by leaps and bounds” with more than 2 million job openings.
Large companies with more than 5,000 employees also prevail with an all-time high of 311,000 openings.
“Big companies are winning the war for talent and consolidating the job market, with mid-sized companies unable to compete,” Pollak said.
On the other hand, the “most dramatic” part of the September report is the decline in finance and insurance jobs. Companies that have benefited from low mortgage rates, a home buying and mortgage refinancing frenzy and a retail stock trading frenzy throughout the pandemic have seen a “huge hiring boom “until mid-2022. Now that the Federal Reserve has raised interest rates and made it more expensive to borrow money, “all of those trends have abruptly reversed,” Pollak said.
Finance and insurance job openings have grown rapidly throughout the pandemic, but have fallen more than 40% in the past two months, Pollak adds. “It’s the only part of the report that looks like a recession.”
Why the job market is still good when we keep hearing about a recession
Labor market turmoil has been more pronounced for Wall Street and Silicon Valley jobs, Pollak says, which tend to get a lot of media coverage but aren’t always a good indicator of what to expect. what the rest of the job market looks like.
A majority of CEOs are bracing for a downturn by cutting headcount, especially around marketing and advertising teams. But as long as consumers spend on goods and services, these workforce reduction plans will continue to be pushed back.
“We’re seeing CEOs preparing for a downturn that hasn’t happened yet and may never happen,” Pollak says. Hotel occupancy rates are stable, airlines continue to see high numbers of travelers, and restaurant spending is healthy, she says. “Main Street businesses continue to do well and fight for talent.”
These sectors will continue to do well and increase hiring as long as Americans are willing to spend, and “the average American consumer is doing pretty well,” Pollak said.
Many Americans, whose economies have exploded throughout the pandemic between spending less and getting the Covid stimulus, still have more money in the bank today than they had before the pandemic, but rates personal savings are falling as high inflation eats away at purchasing power and leads more people to rack up credit card debt.
At some point, that spending growth will have to slow down, Pollak says. This could happen if people start losing their jobs.
Job seekers are less and less daring
Workers in some sectors may be more cautious amid looming recession fears: Quits have fallen in construction; transportation, storage and utilities; and the manufacturing of durable goods, as workers see fewer alternatives for better work and keep their jobs.
Last month’s job seekers are getting less daring, according to a ZipRecruiter index. People are less likely to negotiate their offers and less likely to quit without finding another job. They place more importance on job and business stability, such as large companies in recession-resistant sectors.
That said, Pollak says we are not in a recession, as defined by the National Bureau of Economic Research which looks at sustained declines in personal income, employment, consumer spending and industrial production.
Jobs are plentiful, hiring is strong and layoffs are low. “It’s hard to call something a recession when people are making money and getting good jobs,” she says.
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