Employers are becoming more cautious Withdraw some job advertisements and rein in hiring. Employees are more committed and do not easily jump for better opportunities.
Welcome to the wait-and-see job market.
Some of these patterns are reflected in federal jobs reports that showed employment growth remains historically strong but moderates to just a shadow of the huge gains seen in the early years of the pandemic economic recovery.
In October, employers in the United States Adding 150 thousand net jobsThe unemployment rate rose to 3.9%, according to the Bureau of Labor Statistics.
A similar story likely played out last month but with an added boost from striking autoworkers and actors returning to the workforce (And BLS statistics).
Economists unanimously expect Friday’s jobs report, scheduled for release at 8:30 a.m. ET, to show employment growth of 180,000 jobs and the unemployment rate to hold steady at 3.9%, according to Refinitiv.
“We expect to see moderate growth,” Karen Kimbrough, chief economist at LinkedIn, told CNN in an interview. “And if our data can predict anything, we actually think it will be a somewhat disappointing number.”
If November’s job gains come in as expected, that growth rate would be in line with what was seen during the decade before the pandemic. From 2010 to 2019, a period that included A Record high in 100 months of job growthAbout 183,000 jobs were added per month on average.
Economists had expected 180,000 jobs last month as well, but October’s total was 30,000 jobs short of estimates.
“Some of the weaknesses last month were probably illusory, just because of the strikes,” Julia Pollack, chief economist at online job site ZipRecruiter, told CNN.
United Auto Workers Union, In a successful and unprecedented workThe three major automakers, Ford, General Motors, and Stellantis, went on strike from mid-September until the end of October.
The October employment report included 33,200 jobs counted as missing in the auto and parts industry. The Bureau of Labor Statistics attributed these declines to strike activity: The agency’s strike report for the month counted 25,300 Ford, General Motors and Stellantis workers on strike.
in addition to, BLS strike report for November He noted that the strikes ended for 16,000 SAG-AFTRA workers after the Actors Union and the Hollywood studios He reached an agreement In the first part of last month.
Friday’s report could give more clues as to whether the labor market is returning to a more balanced and stable state, or whether it is slowing more sharply than previously thought. ADP’s private jobs report on Wednesday showed a modest net gain of 103,000 jobs and slowing wage gains, a total lower than economists’ expectations of 130,000.
While much of the attention, deservedly, will be on Friday’s payroll and unemployment numbers as well as wage increase estimates, Data reviews Pollack told CNN that it may also be significant.
“Over the last 10 months or so, job numbers have been revised downwards by an average of over 30,000 jobs,” she said. “If we see further downward revisions, I think a lot of people will conclude that the labor market is weaker than it initially appeared and is calming down very quickly.”
However, job gains remain historically strong, and job cuts are not necessarily rising but remain higher than in the past decade.
In November, U.S. employers announced job cuts of 45,510, according to data released Thursday by Challenger, Gray & Christmas. That’s a 24% increase from October, but a 41% decline from a year earlier, when tech companies were cutting jobs after ramping up during the pandemic.
Year to date, companies have announced plans to cut 686,860 jobs, according to the Challenger report. Outside of 2020, this is the highest January-November total since 2009, when 1.24 million reductions were announced.
First-time claims for unemployment benefits, which are considered an alternative to layoffs, rose to 220,000 for the week ending Dec. 2, according to Labor Department data released Thursday.
Also, while first-time claims for unemployment benefits remain low, Labor Department data also indicates that people are staying unemployed longer.
Continuing claims, filed by people who have received unemployment benefits for at least one week, have risen steadily in recent weeks and reached a yearly high of 1.925 million in mid-November. As of November 25, the number had fallen to 1.861 million.
While this exceeds the historically low continuing claims seen in 2019, it is still well below long-term averages.
“There is no cumulative deterioration yet in the labor market that prompted previous Fed chairs to quickly shift from raising interest rates to lowering rates to support the economy,” Christopher Rupke, chief economist at FwdBonds, wrote in a note Thursday. “Weekly unemployment data will keep the Fed on the sidelines and carefully monitor the risks of doing too much or too little almost in balance. Continued jobless claims looked more worrying last week, but it now appears that the seasonal adjustment problem was responsible for the rise in the number of recipients.”
He added: “Unemployment claims are back in the soft landing camp at the moment, but for how long?”
Although the US labor market is settling into a period of more modest growth, it is well positioned for an eventual recovery.
“High interest rates are holding that back to a large extent,” Pollack said, noting the effects of tightening monetary policy to combat inflation. “Talk to any real estate investor, and they will say they are not building because of high borrowing costs and low valuations… Talk to manufacturers, and despite various incentives and despite the huge amount of spending on factories, employment is not really growing.”
As such, many investments will not reach their potential until interest rates fall, she said. The Federal Reserve raised its benchmark lending rate to… The highest level in 22 years In a battle that lasted months Reducing inflation.
“Employers say they hope and expect business activity will rebound in the back half of 2024,” she added. “The unstated assumption is that inflation will continue to fall, and the Fed will be able to start cutting interest rates.”
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