Are workers still taking advantage of this historically tight labor market, but with a little more caution?
By Wolf Richter for WOLF STREET.
We’ll look at two different sets of data released today that show from different perspectives how tight the labor market still is, how much power is shifting from employers to workers, and how much job losses and layoffs are still going on. tech layoffs are still small compared to the huge overall labor force, and most of the laid-off people are quickly absorbed by other companies, including automakers, non-tech companies that hire armies of tech workers, and industrial plants. companies, oil and gas companies, etc. And those non-tech companies are now hoping to gain better access to the tech labor pool.
The reason there are still huge job losses is the promise of greener grass on the other side of the fence, despite huge pay rises for those who remain.
And the grass is still green, a sign of aggressive recruiting by employers. The average annual salary of employees who changed jobs in November increased by 15.1%; According to the ADP National Employment Report, it is up 7.6% for workers who remain on the job today. But that huge pay rise for business people is down about 1 percentage point from the 16%-plus range earlier this year — a sign that a little more prudence is entering the hiring equation.
Fed Chairman Jerome Powell spent a lot of time in his speech today explaining the challenges of a still very tight labor market — still too many jobs and how little cooling is in sight.
He said, citing the Bureau of Labor Statistics’ Job Openings and Employee Turnover Survey (JOLTS) released today, based on what 21,000 businesses say about the number of job openings, the number of people they actually hire, the number of employees. the people they fired, the number of people fired, etc.
Jobs decreased With 353,000 in October, it reversed some, but not all, of the previous month’s gains. October’s 10.33 million jobs were still up from August and up 3 million, or 41%, from October 2019.
While they remain in the astronomical zone, they’re down about 1.5 million from their peak in March 2022 — and that includes part of the tech sector, which has seen layoffs, as we’ll see in a moment.
Layoffs and layoffs increased With 58,000 in October, after falling more than in September and still lower than in August. Employers reported 1.39 million layoffs and layoffs for any reason, and while that may sound like a lot, it’s historically low in the U.S. labor force, down 23% from October 2019. tight labor market:
The fired workers were quickly rehired.
Most of the people who were laid off quickly found new jobs in this sea of jobs, and we see this everywhere, including in the actual number of people who have applied for unemployment insurance at state unemployment offices.
The number of initial jobless claims last Thursday of 240,000 was higher than in previous weeks, but still lower than in August and July and an all-year and historic low. .
In other words, most of the people who were laid off found a job so quickly or were already in a new job that they didn’t apply for unemployment benefits.
Looking back over the past decade, initial jobless claims had to rise above 300,000 before the labor market began to soften in any meaningful way:
Voluntary “directions” were sunk for the second month in a row at 4.03 million, the lowest since May 2021, a sign that workers are a little more cautious about getting on the job train, and perhaps a sign that some jobs have been lost to enter.
But the number of layoffs is still historically high, up 18% from three years ago and still much higher than before 2021, indicating that workers are still arbitrating in the labor market in large numbers to boost their wages — and they are increased Their salary, as shown by the ADP data above for job changers:
The number of new hires has decreased for the second month in a row, it reached 6.01 million in October — but still up 4% from three years ago and higher than any month before the pandemic. Hiring is still a tight labor market, making it difficult to hire people away from other employers.
Most of the 1.39 million people who were laid off, and most of the 4.03 million who voluntarily “quit” were part of the 6.01 million who were hired by other employers.
Jobs in major industry categories.
Professional and business services, A large category with 22.4 million employees in Professional, Scientific and Technical Services; Company and Enterprise Management; Administrative and Support, Waste Management and Cleaning Services.
This is where some of the tech work happens and some of the tech cuts happen.
- Jobs: -146,000 to 1.79 million, lowest since May 2021 but still very high
- From 3 years ago: +49%
information, a small category with 3 million employees in web search portals, data processing, data transfer, information services, software publishing, motion picture and sound recording, internet broadcasting, including telecommunications.
This is where some of the tech cuts come in as well. But jobs have increased in the last two months!
- Jobs: +5,000 to 235,000, very high, still a crying labor shortage!
- Three years ago: +57%
Health and social care, A large category with about 21 million workers: jobs fell to record lows in September amid ongoing staffing shortages:
- Jobs: -86,000 to 2.0 million from the previous month’s record
- Three years ago: +69%
Relaxation and hospitalityWith around 16 million employees, restaurants and hotels are still struggling with staffing shortages:
- Jobs: unchanged at 1.58 million
- Three years ago: +59%
Retail, With about 16 million workers, it has already normalized in terms of jobs. It is the only sector where jobs are back to where they were before the pandemic.
- Jobs: +24,000 – 879,000
- Three years ago: -1%.
Education – as shown by state and local government jobs, most of which are in education. The shortage of teachers is slightly reduced:
- Jobs: -78,000, third straight month of decline, 802,000 openings, lowest since March 2021
- Three years ago: +22%
production, with approximately 13 million employees:
- Jobs: -89,000, a third straight month of decline, to 746,000, the lowest since December 2021, but still very high and speaks to a labor shortage
- From three years ago: +87%!!!
construction, with approximately 8 million workers in all types of construction:
- Jobs: +52,000 – 371,000
- From three years ago: +15%
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