Raphael Stevens

Job seekers are feeling less confident about their ability to land a new gig.
The labor market has cooled from a red-hot pace in 2021 and 2022. The unemployment rate has increased and businesses aren’t hiring as readily.
While data suggest the labor market remains strong, further cooling could be troublesome, economists said.

Nitat Termmee | Moment | Getty Images

Workers are souring on the state of the job market.
Job seeker confidence in Q2 2024 fell to its lowest level in more than two years, according to a quarterly survey by ZipRecruiter, which has tracked the metric since Q1 2022. That decline suggests workers are more pessimistic about their ability to land their preferred jobs.

Workers had reason for euphoria two to three years ago: The job market was red-hot and, by many metrics, historically strong.
It has remained remarkably resilient even in the face of an aggressive interest-rate-hiking campaign by U.S. Federal Reserve to tame high inflation.
However, the labor market has slowed gradually. Workers are now having a harder time finding jobs and the labor market, while still solid, could be in trouble if it continues to cool, economists said.

“There actually now is reason in the data to understand why job seekers are feeling kind of gloomy,” said Julia Pollak, chief economist at ZipRecruiter. “The labor market really is deteriorating and jobseekers are noticing.”
Demand for workers surged in 2021 as Covid-19 vaccines rolled out and the U.S. economy reopened broadly.

Job openings hit record highs, giving workers ample choice. Businesses competed for talent by raising wages quickly. By January 2023, the unemployment rate touched 3.4%, its lowest level since 1969.
More from Personal Finance:You may get a smaller pay raise next yearWhy employees are less interested in workCFPB cracks down on popular paycheck advance programs
Workers were able to quit their jobs readily for better, higher-paying ones, a period that came to be known as the great resignation or the great reshuffling. More than 50 million people quit in 2022, a record high.
The U.S. economy was able to avoid the recession that many economists had predicted even as inflation declined significantly. However, many Americans still felt downbeat on the economy, a so-called “vibecession” — a sentiment that persists despite the overall economy’s relative strength.
Many job metrics have fallen back to their rough pre-pandemic levels, however. The rate of hiring by employers is at its lowest since 2017.
“The postpandemic excesses of the U.S. job market have largely subsided,” Preston Caldwell, senior U.S. economist for Morningstar Research Services, recently wrote.

The unemployment rate has also ticked up to 4.1% as of June 2024. While that rate is “consistent with a strong labor market,” its steady rise is the “troubling factor,” Nick Bunker, economic research director for North America at the Indeed Hiring Lab, wrote in early July.
The labor market’s broad readjustment has been “mostly welcome” as it comes back into its pre-pandemic balance, Bunker said. But any further cooling “is a riskier proposition,” he said.

“For now, the labor market remains robust, but the future is uncertain,” he wrote in early July after the federal government’s latest batch of monthly jobs data. “Today’s report shows the temperature of the labor market is still pleasant, but if current trends continue the weather could get uncomfortably cold.”
Worker sentiment could rebound if and when the Fed starts cutting interest rates, which could help households by reducing borrowing costs, Pollak said.
“People seize on good news and get very excited,” she said. More

The typical worker will get a 4.1% annual raise for 2025, down from 4.5%, according to a WTW survey.
That growth is still high relative to the recent past.
Company pay increases are largely dictated by supply-and-demand dynamics in the labor market.
The job market has cooled from a scorching level in 2021 and 2022.

Hinterhaus Productions | Stone | Getty Images

Many workers will see their annual raise shrink next year as the job market continues to cool from its torrid pace in the pandemic era.
The typical worker will get a 4.1% pay raise for 2025, down from 4.5% this year, according to a new poll by WTW, a consulting firm.

This is a midyear estimate from 1,888 U.S. organizations that use a fiscal calendar year. Actual raises may change by year-end when the companies finalize their salary budgets.

The size of workers’ salary increases is “driven primarily” by the supply and demand of labor, said Lori Wisper, WTW’s work and rewards global solutions leader. Affordability and industry dynamics play lesser roles, she added.
Companies in the survey would likely pay their annual raises by April 1, 2025, she said.

Job market was ‘unbelievably robust’

Worker pay in 2021 and 2022 grew at its fastest pace in well over a decade amid an “unbelievably robust” job market, Wisper said.
Demand for workers hit records as Covid-19 vaccines rolled out and the U.S. economy reopened broadly. Workers quit their jobs readily for better, higher-paying ones, a trend dubbed the great resignation. More than 50 million people quit in 2022, a record.

Companies had to raise salaries more than usual to compete for scarce talent and retain employees.

The prevalence of incentives like signing bonuses also “grew dramatically,” said Julia Pollak, chief economist at ZipRecruiter.
Almost 7% of online job listings offered a signing bonus in 2021, roughly double the pre-pandemic share, according to ZipRecruiter data. The percentage has dropped to 3.8% in 2024.
“I’m not sure I’ll ever see that kind of job market in my lifetime again,” Wisper said of 2021 and 2022.
More from Personal Finance:CFPB cracks down on popular paycheck advance programsWhy employees are less interested in workWhy a job is ‘becoming more compelling’ for teens
Now, the job market has cooled. Hiring, quits and job openings have declined and the unemployment rate has increased.
Companies may feel they don’t need to offer as much money if they’re not getting as many applications and have fewer job openings, Pollak said.

Almost half — 47% — of U.S. organizations expect their salary budgets to be lower for 2025, according to WTW. (Companies set a salary budget and use that pool of money to pay raises to workers.)  
The current environment “feels like we’re seeing more normal circumstances, where demand is back to where it was pre-pandemic in 2018 and 2019, which was still a very healthy job market,” Wisper said.
Additionally, after two years of declining buying power amid high inflation, the lessening of pricing pressures in recent months has boosted workers’ buying power.

Still high relative to recent past

While the typical 4.1% projected raise is smaller than that during the last pay cycle, it’s “still kind of high” relative to recent years, according to Wisper.
For example, the median annual pay raise had largely hovered around 3% in the years after the 2008 financial crisis, she said.

The increase to more than 4% during the pandemic era was notable: Salary growth tends to fall instead of rise, Wisper said. For example, it was around 4.5% to 5% in the years leading up to the financial crisis, and had never fully recovered, she said.
It’s “something that’s never happened before,” Wisper said. “And [the raises] have stuck, to a degree.”

Don’t miss these insights from CNBC PRO More

Four of the world’s largest chip equipment manufacturers have more than doubled the share of their China revenue since late 2022, Bank of America analysts said.
“China accelerated its purchase of semi manufacturing equipment since the U.S. imposed tighter export restrictions in October 2022, aiming to develop its own semi manufacturing capability,” the report said.
The research found the companies’ China revenue more than doubled from 17% of total revenue in the fourth quarter of 2022 to 41% in the first quarter of 2024.

A worker produces chips at a semiconductor manufacturing enterprise in Binzhou, China, on June 4, 2024.
Nurphoto | Nurphoto | Getty Images

BEIJING — Four of the world’s largest semiconductor equipment manufacturers, including ASML, have seen the share of their China revenue more than double since late 2022, Bank of America analysts said in a report Monday.
“China accelerated its purchase of semi manufacturing equipment since the U.S. imposed tighter export restrictions in October 2022, aiming to develop its own semi manufacturing capability,” the report said.

The BofA analysis looked at Lam Research, ASML, KLA Corp. and Applied Materials.
The research found the companies’ China revenue more than doubled from 17% of their total revenue in the fourth quarter of 2022 to 41% in the first quarter of 2024.
“Tech, especially semi, is at the center stage of trade tensions with China, which could be more at risk if tensions further escalate from here,” the report said.
The U.S. in October 2022 started imposing sweeping export controls on U.S. sales of advanced semiconductors and related manufacturing equipment to China. Last week, Bloomberg reported, citing sources, that the Biden administration was considering broader restrictions on semiconductor equipment exports to China that could affect non-U.S. companies.
Beijing, meanwhile, has sought to bolster its tech self-sufficiency, a goal top leaders reaffirmed at a key policy meeting last week.
The VanEck Semiconductor ETF (SMH), which tracks U.S.-listed chip companies, has fallen in the last week but is still holding gains of nearly 46% for the year so far. More

A dog looks out the window from a Tesla electric vehicle charging at a Tesla Supercharger location in Santa Monica, California, on May 15, 2024.
Patrick T. Fallon | AFP | Getty Images

Check out the companies making headlines in extended trading:
Alphabet — The tech giant slipped 1% despite a beat on both top and bottom lines in the second quarter. Alphabet earned $1.89 per share on $84.74 billion in revenue. Consensus estimates had called for earnings of $1.84 per share on $84.19 billion in revenue. However, revenue at its YouTube advertising segment missed forecasts.

Tesla — Shares of the electric vehicle maker declined 4.7% after second-quarter earnings missed consensus estimates. Tesla reported adjusted earnings per share at 52 cents, while analysts surveyed by LSEG had called for 62 cents per share. On the other hand, the company posted $25.5 billion in quarterly revenue, which was slightly higher than the $24.77 billion estimated by the Street. 
Visa — Shares slipped more than 2% after the company posted a revenue miss in its fiscal third quarter. Visa reported $8.9 billion in revenue, which came in slightly below the $8.92 billion forecast by analysts polled by LSEG. Meanwhile, payments volume rose 7% in the quarter. 
Seagate — Shares rallied more than 6% after Seagate posted an earnings and revenue beat in the fiscal fourth quarter. Seagate earned $1.05 per share, excluding items, on $1.89 billion in revenue. Analysts surveyed by LSEG had estimated it would earn 75 cents per share on revenue of $1.87 billion. The company cited an improving cloud environment for its stronger performance.
Capital One Financial — Shares of the credit card issuer fell about 1% after its second-quarter profit fell from a year ago as the bank put aside more money to offset potential credit losses. Revenue rose 5% to $9.51 billion from the year-ago period, but was lower than analysts surveyed by LSEG had expected.
Texas Instruments — The chipmaker rallied 5% after reporting better-than-expected earnings. Texas Instruments recorded $1.22 in earnings per share versus the consensus estimate of $1.17 per share, per LSEG. The company’s revenue of $3.82 billion came in line with forecasts.

Mattel — The toymaker advanced more than 1% after announcing its second-quarter results. Its adjusted earnings per share of 19 cents topped analysts’ estimates for 17 cents per share, according to LSEG data. Revenue of $1.08 billion slightly missed forecasts of $1.1 billion. Mattel reiterated its full-year guidance and highlighted its gross margin expansion.
Cal-Maine Foods — Shares of the nation’s largest egg producer fell 1% as the avian flu outbreak continues to pressure its performance. In the fiscal fourth quarter, earnings of $2.32 per share were higher than a year ago, but shy of the $2.41 per share analysts predicted, according to FactSet. Sales of $640.8 million also fell short of the $652.3 million estimate.
Enphase Energy — The solar energy stock added 5% despite weaker-than-expected second-quarter results. Enphase posted earnings of 43 cents per share, after adjustments, which was 5 cents below consensus estimates, according to LSEG. Revenue of $304 million also fell short of the $310 million analysts forecast. However, shares rose on better-than-expected margins and its third-quarter forecast of between $370 million and $410 million in revenue, which was above the $404 million analyst estimate.
Chubb — The insurance company gained nearly 1%. Adjusted earnings per share came in at $5.38 in the second quarter, beating the consensus estimate of $5.14 per share, per FactSet. 
— CNBC’s Christina Cheddar Berk contributed reporting. More

Over the past two decades China has devoured enormous amounts of raw materials. Its population has grown bigger and richer, requiring more dairy, grain and meat. Its giant industries have been ravenous for energy and metals. In recent years, though, the economy has suffered from political mismanagement and a property crisis. Chinese officials are adamant that they want to shift away from resource-intensive industries. Logic dictates that the country’s appetite for commodities should be shrinking, and shrinking fast.In reality, the opposite is happening. Last year China’s imports of many basic resources broke records, and imports of all types of commodities surged by 16% in volume terms. They are still rising, up by 6% in the first five months of this year. Given the country’s economic struggles, this does not reflect growing consumption. Instead, China appears to be stockpiling materials at a rapid pace—and at a time when commodities are expensive. Policymakers in Beijing seem to be worried about new geopolitical threats, not least that a new, hawkish American president could seek to choke crucial supply routes to China. More