The labor market recorded 10.7 million new jobs in June, down from 11.3 million in May but also significantly higher than last year and an increase of more than 50% from before the pandemic. Despite the decline, there are still approximately 1.8 jobs open for every unemployed person.
Meanwhile, workers continue to capitalize on the market and make moves: 6.4 million people have been placed in new jobs, and 4.2 million people have quit voluntarily — stable from record levels but still very high.
Nick Bunker, director of economic research at Indeed Hiring Lab, says the labor market slowdown is “a far cry from collapse.”
“The labor market is sluggish a little bit, but it’s still tight by all accounts,” Bunker adds. “Economic growth prospects may not be as rosy as they were a few months ago, but there is no sign of imminent danger in the labor market.”
People are worried about the future of jobs but they are still quitting now
Workers are getting more and more anxious about which jobs they choose in the coming months, but that doesn’t stop many of them from calling on those jobs right now. The percentage of people who left their jobs voluntarily in June made up 2.8% of the workforce.
Workers’ confidence in the labor market fell slightly in June and July compared to May, according to the ZipRecruiter Index, which measures sentiment across 1,500 people. The index also showed a slight rise in job seekers who believe there will be fewer jobs six months from now, a decrease in people saying their job search is going well and a slight increase in people feeling financially pressured to accept their first job offer. received.
People may also be afraid of the headlines of big-name companies, particularly those in the tech and housing sectors that have seen growth in the Covid era, announcing layoffs, hiring freezes and canceling job offers in recent months.
Bunker recognizes that “there are pockets of the economy and the labor market going through turmoil,” he says, “but they are mostly concentrated pockets.”
These workers may also be assigned to new jobs very quickly. The national unemployment rate held steady at 3.6% in June.
Looking ahead, Bunker expects to see salary growth and employment expansion in Friday’s jobs report. “If you are considering a job change, it is still a good time,” he says, adding that job seekers may focus more on going to an industry, sector or employer with “strong economic prospects.”
A slowdown in hiring does not indicate an inevitable recession
In contrast to the strong job numbers, economists and consumers alike are concerned about a possible recession.
“We have a paradox in our economy because of the conflicting signals,” says Andrew Flowers, labor economist at Appcast and director of research at Recruitonomics.
For example, the percentage of people applying for unemployment insurance has risen in recent weeks. But according to a Labor Department report, layoffs remained just under 1% in June, near record lows.
Inflation fears are likely to be blamed, Bunker says, but the reasons for “growing anxiety about a recession have not yet been fully realized”.
Flowers says the latest jobs numbers point more to an economic slowdown than a recession. However, lower demand for employment may not lead to mass layoffs.
“Should people be concerned? Right now, it’s not clear,” Flowers says. “My message to job seekers and workers is that it is not clear that this economic slowdown will lead to a material increase in unemployment.”
“As the economy shifts into a lower growth gear, which is the Fed’s intent, this does not mean that we will suddenly face 10% unemployment,” he adds.
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