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Economists say the U.S. job market is cooling gradually but remains hot despite year-long government curbs, a favorable environment for many job seekers.
“It still comes down to higher employee leverage, better external opportunities, easier access to better jobs, and a massive increase in job security,” said Julia Pollak, chief economist at ZipRecruiter.
“You’re lucky,” she added of the staff.
Federal and private labor force data released Thursday supported that view.
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Layoffs fell slightly in May as employers hired more workers, according to statistics Job vacancy and labor turnover surveysreleased monthly by the U.S. Bureau of Labor Statistics.
According to the JOLTS report, Americans are also resigning in large numbers. Economists said the rise indicated a return of workers’ confidence in finding a new job as most workers quit to look for new jobs.
While job openings, a barometer of business demand for workers, fell by about 500,000 in May, they are still well above pre-pandemic levels.
Overall, job vacancies and monthly turnover are up 40% and 15%, respectively, compared to before the Covid-19 pandemic, while monthly layoffs are down 21%, suggesting a “strong and resilient” labor market, Pollak said.
Separately, payroll processing firm ADP said Thursday that private sector payrolls surged by 497,000 in June, easily beating expectations for 220,000. The U.S. Labor Department will release its monthly employment report on Friday morning, and the ADP data could signal continued strength in the U.S. job market.
Interest rate hikes, banking turmoil have little impact
As the U.S. economy fully reopens in early 2021, workers have unprecedented leverage. Workers are starting to quit in record numbers — a trend known as the “Great Quit” — and their wages are rising at the fastest pace in decades.
The job market has cooled as the Federal Reserve raised borrowing costs to curb inflation and banks scaled back lending amid turmoil earlier this year. But its rise continued to exceed expectations.
“It’s really shocking that job vacancies are still so high amidst monetary tightening, inflation and a banking crisis,” said Aaron Terrazas, chief economist at job site Glassdoor.
It’s so exciting…job openings are still so high.
Aaron Terrazas
Chief Economist, Glassdoor
“Overall, the market continues to slow gradually,” he added.
However, this is not good news for all workers. Economists say there are some areas of weakness.
“It’s still a dual-track economy story,” Terrazas said.
Citing JOLTS data, for example, Pollack said layoffs in the information industry, which includes technology and media companies, rose 6% in May compared with pre-pandemic levels, and resignations fell 17%.
Overall, while job seekers can feel comfortable with ample hiring and the ability to quit for better jobs, it may take longer to find the right fit in a slowing labor market, Pollack said. candidates.
That might mean signing up for job alerts and making sure to apply right away, she said.
“It’s a numbers game and workers may have to play it smarter,” Pollack added.
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