Labor market is ‘like hell’ ahead of jobs report

U.S. employers announced just 20,485 layoffs in August, the lowest year-to-date total since 1993, according to data released Thursday by outplacement firms Challenger, Gray & Christmas.

A separate report from the Labor Department said initial jobless claims for the week ending Aug. 27 fell to 232,000, down 5,000 from the previous week’s level and revised downwards at 6,000 claims. Your bill is now at its lowest level in two months.

Recent employment data, including the July jobs report and turnover survey, came after the labor market neared recovery from the pandemic and as the Federal Reserve took extreme steps to curb and contain inflation. defied expectations by analysts and economists that the labor market would cool. demand.

Employment growth is expected to slow to around 250,000 in July, with job openings also rising. fall to 10.5 million. Instead, 528,000 jobs added When Available jobs surge to 11.2 million.

“The labor market is not just a frenzy, it’s a hell on fire,” said Megan Greene, global chief economist at the Kroll Institute and a senior fellow at Brown University.

The Federal Reserve sees the current ratio of two job openings to all job seekers as a potential driver of higher wages, which will lead to higher prices and lower inflation. We believe it will continue to rise. Friday’s jobs report will watch closely for signs of slowing job growth.

layoffs looming

lay off news Dominating the business headlines these days, Ron Hetrick, senior labor economist at labor market analysis firm Rightcast, said while this could indicate a broader market crack, it also represents a firm- or industry-focused development. .

Most of these announcements are of technology and technology-adjacent companies expanding their workforces to meet the sudden demand for services during the pandemic.

“Things are cooling down again, so these industries [scale back] About the jobs they did,” he said.

as a pandemic Mitigation, other industries see more demand. In 2020-2021, people are back to spending on vacations, dining in restaurants, and other areas of service, but those activities weren’t easily accessible in his 2020-2021. The change has weakened some companies, said Gus Faucher, senior vice president and chief of his economist. With PNC Financial Services Group. “That said, demand in the economy is still strong and many businesses are still understaffed, so finding new jobs is fairly easy for laid-off workers.”

Less than 1 in 3 unemployed people have been out of work for 15 weeks or more. BLS show dataThat’s a level not seen since before the Great Recession, except for a brief dip in mid-2020 when the labor market began to surge after pandemic lockdowns were eased.

But companies still need workers

Labor shortages are weighing heavily on businesses in some parts of the country. The Federal Reserve Bank of Minneapolis then surveyed 444 members across six state districts, Most respondents said they plan to remain employed over the next six months, and 10% said they are reducing staff.
Businesses in states such as Maryland, Virginia and North Carolina are also paying attention to staffing, according to the Federal Reserve Bank of Richmond, but few are cutting jobs, said a vice president and regional executive. R. Andrew Bauer said:Recently podcast.

“What they are likely to do is, if a position opens, they will be slow to fill that position in anticipation of what will happen,” he said.

There are several systemic challenges to closing the labor shortage gap.Small workforce Below pre-pandemic levels, the labor force participation rate has fallen from around 67% in the early 2000s to just above 62% in July. Economists had expected that percentage to rise as the economy added jobs. But this year it really fell.

“Those four to five percentage points represent the millions we really need,” says Hetrick.

A restaurant worker prepares a sauce at a Washington, DC tavern

Economists have no idea who these missing workers are and who they are due to lack of childcare, health-related concerns, potentially restrictive immigration policies, and early retirement that hastened decades of demographic dynamics. We’re continuing to look into what’s keeping us out of the workplace.

There are also many unknowns, such as the impact on disheartened or less attached workers, or workers suffering from the lingering or chronic effects of Covid-19.Recent study from the Brookings Institution It is presumed to be ‘Long Covid’. Keeping up to 4 million people out of the workforce.

Bonnie Dowling, associate partner at business consulting firm McKinsey, said the scales still tipped heavily toward workers despite growing economic uncertainty.

“If you are in the market, 2 jobs per person looking for, I wouldn’t say it’s a seller’s market,” she said.
Fed Chairman Jerome Powell says

Dowling was a co-author of a recent McKinsey report that sought to address a severe shortage of workers and what may be turning young employees into side jobs.

Aspects such as workplace flexibility, meaningful work and rewards were cited as some of the key desires, according to the report.

“I don’t think many of them will be back in the labor market. without a promise that those needs will be met“And they made it clear that if they came in with that promise and they didn’t keep it, they were willing to leave again.”

“We have to fundamentally rethink how we work,” she added.


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