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It wasn’t that long ago that workers had the power to “quietly quit” or participate in mass resignations. It’s not that easy anymore.
Some laid-off employees report struggling with the job search and hiring process. In fact, 55% of job seekers continue looking for a new role for so long that they feel completely burnt out, according to a study by Insight Global, a national staffing agency. The survey was conducted in July among 501 unemployed adults who were actively looking for work.
Workers are feeling the squeeze in the labor market, but in theory and as economists understand it, it’s actually strong. One reason for this is that broader data does not reflect trends in affected regions.
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“A big reason for the disconnect is that different cities and states have different ways of recovering,” said Ali R. Bustamante, a labor economist and deputy director of the Workforce and Economic Security Program at the Roosevelt Institute, a New York-based think tank. It’s about being uneven.” .
Bustamante said that while the country as a whole is showing resilience on average, unemployment remains high in some regions, along with rising costs of living.
Companies aren’t “adding a ton of staff”
According to the U.S. Bureau of Labor Statistics’ monthly job openings and turnover survey, there were 9 million job openings in December, a slight increase from November, but a record high of 12 million job openings in March 2022. It has decreased since then.
On top of that, both layoffs and hiring are at low levels, meaning companies may not hire new workers as much as they used to, said Julia Pollack, senior economist at ZipRecruiter. .
Layoffs and layoffs were little changed at 1.6 million, staying at 1% for the fourth consecutive month. Meanwhile, the employment rate increased slightly in December to 3.6%, but is still well below the 2019 average of 3.9%, Pollack said.
The hiring rate fell to 3.5% in November, the lowest level since 2014, excluding the recession caused by the COVID-19 pandemic. He said the overall hiring rate for 2023 averaged 3.8%, which was only the 11th best year out of 23 years.
“Companies aren’t growing or expanding or adding a ton of employees,” Pollack said. “It’s difficult if you’re a new graduate, for example. It’s not the easiest time to start your career.”
“Job growth would be expected to slow.”
“If we continue on this path, we would expect job growth to slow as we move closer and closer to full employment,” said Elise Gould, senior economist at the Economic Policy Institute, a nonpartisan think tank. Ta. “The reserve capacity of workers is decreasing because more people have jobs.”
There were even more openings a few years ago because of high turnover. Employers were always hiring, Gould said, because employees frequently quit and were hired elsewhere.
“We’ve had more customer churn, but it’s certainly slowed down quite dramatically,” she said.
Unemployment rates still rising in some states
There are two reasons why worker sentiment is disconnected from broader job market data: geography and the “economy triple,” Bustamante said.
Unemployment rates are still rising in some states, exceeding the national average and even higher than before the pandemic.
“The reason this is happening is because each state is so different. If you dig deeper into some regions, you’ll find that there’s a lot of disparity in how communities are recovering… The economic sentiment numbers reflect that,” Bustamante said. .
From October to November, the job opening rate decreased in four states, increased in two states, and remained largely unchanged in 44 states and the District of Columbia. Employment rates declined in Montana (1%), Arizona and Oregon (0.7% each), and California and Connecticut (0.6% each), according to the Bureau of Labor Statistics.
Second, the recent economy has reached a “trifecta” situation of really strong economic conditions. The Federal Reserve paused rate hikes last July, inflation is expected to peak in September 2022, and wage growth will hit a record high in 2023.
Although these are recent improvements in the overall economy, they are not yet reflected in worker sentiment. Because of inflation, wage increases did not strengthen consumers’ purchasing power. It will take some time for the Fed’s suspension of interest rate hikes to be reflected in borrowing costs.
“If you look at the overall positive news that there will be no more interest rate hikes, inflation is under control and wages are still rising…this three-way situation has lasted for only a few months,” Bustamante said. Only,” he said.
Bustamante said it was only a matter of time before economic conditions had a lasting impact on consumer sentiment.
ZipRecruiter’s Pollack said there’s a risk that national labor statistics may be too cold. Key indicators such as job separation and employment worsened further from 2019 levels. He said these measures would continue to decline if interest rates remained stable.
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