A storefront in Montebello, California on December 9, 2021.
Frederick J. Brown | Afp | Getty Images
Workers continue to benefit from a hot labor market characterized by near-standard demand for their labor, which translates to ample choices and higher wages.
However, there are signs of a slowdown in some industries and Federal Reserve policy could dampen the good times for workers.
“Workers continue to have a significant amount of influence in the US labor market,” according to an analysis by Nick Bunker, director of economic research at Indeed Hiring Lab.
“[They’re] They are having their moments in the sun, but some clouds will probably come in and darken the view.”
The US Labor Department said on Wednesday there were 1.2 million layoffs in April, a record low. This indicates that employers are trying to hold on to their workers amid a rising number of vacancies and voluntary resignations, or “resignations”.
The number of job vacancies reached 11.4 million at the end of this April Down from a record 11.9 million opening in March But it’s still close to all-time highs, according to the Department of Labor. (Openings are a proxy for the employer’s demand for workers.)
There were 1.9 jobs per unemployed person in April, down slightly from about 2 per person in the previous month.
More than 4.4 million people quit their jobs in April, just 25,000 fewer than the record in March, due to abundant opportunities elsewhere.
Employers raise wages to compete. The average worker’s wage growth rate rose 6% in April from a year earlier, the largest annual increase in more than two decades, according to To the Federal Reserve Bank of Atlanta.
But there are signs that growth may have stalled. The 6% rate, while high by historical standards, has not changed since March 2022.
“Things seem to have gone a little bit better but they are still at a very high level of employer demand,” said Daniel Chow, chief economist at employment website Glassdoor.
“And while there are concerns about a slowdown or even a recession, this really doesn’t look like a job market is about to slip into recession,” he added.
Employer demand swelled starting in early 2021 as the US economy opened wider from the recession caused by the pandemic, and with Covid-19 vaccines becoming more widely available.
Workers have not responded at a steady pace, for many reasons such as ongoing health concerns, family care responsibilities, cash reserves from family stimulus funds and a broader rethinking of workers’ jobs.
However, job opportunities and resignations declined in sectors such as retail, accommodation and food services, indicating a decline, according to Leila Okan, chief economist at Emsi Burning Glass.
“Some sectors that have experienced [swiftest] The increases in smoking cessation and wage growth are beginning to subside, Bunker said. “Times are still good for workers, but they are not likely to get much better.”
The Federal Reserve is raising interest rates to reduce high inflation, which could dampen employers’ demand for workers. However, the final effect and timing are unclear.
“The expectation is that the labor market will calm down,” Zhao said. “That’s what the Fed is trying to do – cool the economy down, bring down inflation, and naturally we’d expect the labor market to cool down as well.”