Unemployment

More stories

  • 150 Shares199 Views

    in Economy

    With Surge in July, U.S. Recovers the Jobs Lost in the Pandemic

    by

    U.S. job growth accelerated in July across nearly all industries, restoring nationwide employment to its prepandemic level, despite widespread expectations of a slowdown as the Federal Reserve raises interest rates to fight inflation.Employers added 528,000 jobs on a seasonally adjusted basis, the Labor Department said on Friday, more than doubling what forecasters had projected. The unemployment rate ticked down to 3.5 percent, equaling the figure in February 2020, which was a 50-year low.The robust job growth is welcome news for the Biden administration in a year when red-hot inflation and fears of recession have been recurring economic themes. “Today’s jobs report shows we are making significant progress for working families,” President Biden declared.The labor market’s continued strength is all the more striking as gross domestic product, adjusted for inflation, has declined for two consecutive quarters and as consumer sentiment about the economy has fallen sharply — along with the president’s approval ratings.“I’ve never seen a disjunction between the data and the general vibe quite as large as I saw,” said Justin Wolfers, a University of Michigan economist, noting that employment growth is an economic North Star. “It is worth emphasizing that when you try to take the pulse of the overall economy, these data are much more reliable than G.D.P.”But the report could stiffen the Federal Reserve’s resolve to cool the economy. Wage growth sped up, to 5.2 percent over the past year, indicating that labor costs could add fuel to higher prices.The Fed has raised interest rates four times in its battle to curb the steepest inflation in four decades, and policymakers have signaled that more increases are in store. That strategy is likely to lead to a slowdown in hiring later in the year as companies cut payrolls to match expected lower demand.Already, surveys of restaurateurs, home builders and manufacturers have reflected concern that current spending will not continue. Initial claims for unemployment insurance have been creeping up, and job openings have fallen for three consecutive months.“At this stage, things are OK,” said James Knightley, the chief international economist at the bank ING. “Say, December or the early part of next year, that’s where we could see much softer numbers.”Payrolls have fully recovered the jobs lost in the pandemic.Cumulative change in jobs since before the pandemic More

  • 125 Shares159 Views

    in Economy

    U.S. jobs report shows a gain of 528,000 in July.

    by

    U.S. employers added 528,000 jobs in July, the Labor Department said on Friday, again outstripping expectations for a labor market that is still rebounding from the pandemic but that has come under increasing pressure from inflation as well as from escalating interest rates meant to rein in prices.The impressive performance — which brings the total employment back to its level of February 2020, just before the pandemic lockdowns — indicates that a slowdown in some industries has not been enough to drag down overall hiring. And it provides new evidence that the United States has not entered a recession.But most forecasters expect that momentum to slow markedly later in the year, as companies cut payrolls to match lower demand.“At this stage, things are OK,” said James Knightley, the chief international economist at the bank ING. “Say, December or the early part of next year, that’s where we could see much softer numbers.”The unemployment rate was 3.5 percent, down from 3.6 percent in June, matching its 50-year low on the eve of the pandemic.Last week, the government reported that the nation’s gross domestic product, the broadest measure of economic output, had contracted for the second consecutive quarter when adjusted for inflation. The data showed a sharp decline in home building, a slackening of business investment and a sluggish rise in consumer spending.Those trends are bound to affect the labor market overall, even if not uniformly or immediately.Amy Glaser, a senior vice president at the global staffing agency Adecco, said her firm was still struggling to fill hourly jobs, especially in retail and logistics. Employers may not have made those positions attractive enough, and, increasingly, may do without them.“I think we do have a gap in the jobs that are available and the desire to do those jobs,” Ms. Glaser said. “We know there are tens of thousands of warehouse jobs out there, but standing on your feet for 10 hours a day isn’t everyone’s cup of tea.” More

  • 150 Shares99 Views

    in Economy

    Job Openings Fell in June, Suggesting That the Labor Market Is Cooling

    by

    The number of job openings fell for the third consecutive month in June, a sign that the red-hot U.S. labor market may be starting to cool off.Employers posted 10.7 million vacant positions on the last day of June, the Labor Department said Tuesday. That is high by historical standards but a sharp drop from the 11.3 million openings in May and the record 11.9 million in March. It was the largest one-month decline in the two decades that the government has kept track of this data, other than the two months at the beginning of the coronavirus pandemic in 2020.Job openings are falling, but remain highMonthly U.S. job openings, seasonally adjusted

    Source: Bureau of Labor StatisticsBy The New York TimesThe drop was concentrated in retail, the latest sign that the sector is struggling as consumers shift their spending from goods back to services as the pandemic ebbs. But job postings have also fallen in leisure and hospitality, the sector that was the most strained by labor shortages last year.The job market remains strong by most measures. There were still nearly twice as many job openings as unemployed workers in June, and employers are raising pay and offering other incentives to attract and retain staff. Layoffs remained near a record low in June, suggesting that employers were reluctant to part with staff they worked so hard to hire. And the number of workers voluntarily quitting their jobs remains high, although it has fallen from last year’s peak.The recent decline in openings is likely to be encouraging news for policymakers at the Federal Reserve, who have been trying to slow down the economy in an effort to tame inflation. Jerome H. Powell, the Fed chair, and other officials have pointed to the number of vacant jobs as evidence that the labor market is too hot. They are hoping that employers will start posting fewer jobs and hiring fewer workers before they begin laying people off, allowing the job market to cool down without causing a spike in unemployment.Still, any slowdown in the job market will mean that workers have less leverage to demand raises when pay is already failing to keep up with inflation. Slower wage growth, in turn, could lead consumers to spend less, increasing the risk that the United States could slip into a recession.The labor market “is definitely losing momentum, and that’s what is chipping away at people’s ability to spend,” said Tim Quinlan, a senior economist for Wells Fargo.Economists and policymakers will get a more up-to-date picture of the job market on Friday, when the Labor Department releases data on hiring and unemployment in July. Forecasters surveyed by FactSet expect the report to show that employers added about 250,000 jobs last month, down from 372,000 in June. More

  • 125 Shares199 Views

    in Economy

    U.S. Economy Added 372,000 Jobs in June, Defying Slowdown Fears

    by

    The strong Labor Department report comes as consumers and businesses express increasing concern about a downturn.The U.S. economy powered through June with broad-based hiring on par with recent months, keeping the country clear of recession territory even as inflation eats into wages and interest rates continue to rise. Employers added 372,000 jobs, the Labor Department reported Friday, and the unemployment rate, at 3.6 percent, was unchanged from May and near a 50-year low. Washington and Wall Street had keenly awaited the new data after a series of weaker economic indicators. The June job growth exceeded economists’ forecasts by roughly 100,000, offering some reassurance that a sharper downturn isn’t underway — at least not yet. But the strength of the report, which also showed bigger wage gains than expected, could give the Federal Reserve more leeway for tough medicine to beat back inflation. Now, all eyes will be watching whether the Fed’s strategy of raising interest rates pushes the country into a recession that inflicts harsh pain. Employment growth over the last three months averaged 375,000, a solid showing though a drop from a monthly pace of 539,000 in the first quarter of this year. Employers have continued to hang on to workers in recent months, with initial unemployment claims rising only slightly from their low point in March.The private sector has now regained its prepandemic employment level — an achievement trumpeted by the White House on Friday — though the level is still below what would have been expected absent the pandemic. Other than the public sector, no broad industry lost jobs in June, on a seasonally adjusted basis.“We’ve essentially ground our way back to where we were pre-Covid,” said Christian Lundblad, a professor of finance at the Kenan-Flagler Business School at the University of North Carolina. “So, this doesn’t necessarily look like a dire situation, despite the fact that we’re struggling with inflation and economic declines in some other dimensions.”Strong demand for workers is also evident in the 11.3 million jobs that employers had open in May, a number that remains close to record highs and leaves nearly two jobs available for every person looking for work. In this equation, any workers laid off as certain sectors come under strain are more likely to find new jobs quickly. The Labor Department’s broadest measure of labor force underutilization — which includes part-time workers who want more hours and people who have been discouraged from job hunting — sank to its lowest rate since the household survey took its current form in 1994, a sign that employers are maximizing their existing work force as hiring remains difficult. The education and health sector gained the most jobs in June.Change in jobs, by sector More

  • 113 Shares149 Views

    in Economy

    The Potential Dark Side of a White-Hot Labor Market

    by

    The strong job market may be about to take a turn for the worse. That could come to haunt those who made choices based on today’s conditions.Shanna Jackson, the president of Nashville State Community College, is struggling with a dilemma that reads like good news: Her students are taking jobs from employers who are eager to hire, and paying them good wages.The problem is that students often drop their plans to earn a degree in order to take the attractive positions offered by these desperate employers. Ms. Jackson is worried that when the labor market cools — a near certainty as the Federal Reserve Board raises interest rates, slowing the economy in an attempt to control rapid inflation — an incomplete education will come back to haunt these students.“If you’ve got housing costs rising, gas prices going up, food prices going up, the short-term decision is: Let me make money now, and I’ll go back to school later,” Ms. Jackson said. Anecdotally, she said, the issue is most intense in hospitality-related training programs, where credentials are often valued but not technically required.Strong labor markets often encourage people to forgo training, but this economic moment poses unusually difficult trade-offs for students with families or other financial responsibilities. Cutting working hours to go to class right now means passing up the benefits of strong wage growth at a moment of soaring fuel, food and housing costs.Taking advantage of the plentiful job opportunities available now could come with upsides — employment can build résumés and provide people with valuable experience and skills. But labor economists say that deciding to skip school and training today could come at a cost down the road. Research consistently suggests that people with degrees and skills training earn more and have more job stability in the longer run.“It’s really great to have income, but you also want to keep your eye on the future,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said in an interview last week. “Workers with higher skills will have higher wages and more upside potential.”Ms. Daly speaks from personal experience. She herself dropped out of high school at age 15 to earn money. She eventually earned her graduation equivalency and enrolled in a semester of classes at a local college, but had to work three part-time jobs — at a Target, a doughnut shop and a deli — to support herself while she studied. She went on to pursue a degree full time and later earned a Ph.D. in economics.“That hard work was the best choice I have ever made,” she said. Drawing on her own experience and on the data she parses as a labor economist, she often urges young people to stay in training to improve their own future opportunities, even if they have to balance it with work.“The jobs that are hot right now — restaurants, warehousing — these are things that won’t last forever,” Ms. Daly said.Many sectors are, unquestionably, booming. Today’s labor market has 1.9 open jobs for every available worker and the fastest wage growth for rank-and-file workers since the early 1980s. That’s especially true for lower-wage occupations in fields such as leisure and hospitality.The State of Jobs in the United StatesJob gains continue to maintain their impressive run, even as government policymakers took steps to cool the economy and ease inflation.May Jobs Report: U.S. employers added 390,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fifth month of 2022.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.Higher Interest Rates: Spurred by red-hot inflation, the Federal Reserve has begun raising interest rates. What does that mean for the job market?Against that backdrop, fewer students are opting to continue their education. The latest enrollment figures, released in May by the National Student Clearinghouse Research Center, showed that 662,000 fewer students enrolled in undergraduate programs this spring than had a year earlier, a decline of 4.7 percent.Community college enrollment is also way down, having fallen by 827,000 students since the start of the pandemic. The decline is likely partly demographic, and partly a result of choices made during the pandemic.The shift to online learning was challenging for many students, and, just as schools were allowing students back into the classroom, the job market heated up and opportunities suddenly abounded. Inflation began to ratchet up at the same time, making earning money more critical as the cost of rent, gas and food climbed. That confluence of factors is likely keeping many students from continuing to pursue their education.Gabby Calvo, 18, left the business administration program at Nashville State this year. She said she did not know what she wanted to do with the degree, and had begun making good money, $21 an hour, as a front-end manager at a Kroger grocery store. The job was an unusual one for someone her age to land.“They didn’t really have anyone, so they took a chance on me,” she said, explaining that nobody else stood ready to fill the position and she had worked closely with the person who held it previously.Teenagers are often finding they can land positions they might not have otherwise as companies stretch to find talent, and teenage unemployment is now hovering near the lowest level since the 1950s.Ms. Calvo is hoping to work her way up to the assistant store-manager level, which would put her in a salaried position, and thinks she has made the prudent choice in leaving school, even if her parents disagree.“They think it’s a bad idea — they think I should have quit working, gone to college,” she said. But she has made enough money to put her name on a lease, which she recently signed along with her boyfriend, who is 19 and works at the restaurant in a local Nordstrom.“I feel like I have a lot of experience, and I have a lot more to gain,” Ms. Calvo said.The question, then, is how people like Ms. Calvo will fare in a weaker labor market, because today’s remarkable economic strength is unlikely to continue.The Fed is raising rates in a bid to slow down consumer demand, which would in turn cool down job and wage growth. Monetary policy is a blunt instrument: There is a risk that the central bank will end up pushing unemployment higher, and even touch off a recession, as it tries to bring today’s rapid inflation under control.That could be bad news for people without credentials or degrees. Historically, workers with less education and those who have been hired more recently are the ones to lose their jobs when unemployment rises and the economy weakens. At the onset of the pandemic, to consider an extreme example, unemployment for adults with a high school education jumped to 17.6 percent, while that for the college educated peaked at 8.4 percent.The same people benefiting from unusual opportunities and rapid pay gains today could be the ones to suffer in a downturn. That is one reason economists and educators like Ms. Jackson often urge people to continue their training.“We worry about their long-term futures, if this derails them from ever going to college, for a $17 to $19 Target job. That’s a loss,” said Alicia Sasser Modestino, an associate professor at Northeastern University who researches labor economics and youth development. Still, Ms. Sasser Modestino said that taking high-paying jobs today and pursuing training later did not have to be mutually exclusive. Some people are getting jobs at places that offer tuition assistance while others can work and study at the same time.Other students, like Ms. Calvo, might use the time to figure out what they want to do with their futures in ways that will leave them better off in the long run.Plus, the economy could be shifting in ways that continue to keep workers in high demand. Baby boomers continue to age, and immigration has declined sharply during the pandemic, which could leave employers scrambling for employees for years. If that happens, degrees and certificates — labor market currency for much of the past two decades — may prove less essential.Luemettrea Williams, who holds down three jobs in order to pay her tuition and other bills, at her job in a doctor’s office in Nashville in May.Laura Thompson for The New York Times“There comes a point at which there are so few high school graduates to play with that you have to give your pool cleaner a raise,” said Anthony Carnevale, the director of Georgetown University’s Center on Education and the Workforce. Plus, Mr. Carnevale said, economic policies coming out of Washington could add to the need for high-school-educated workers for a time. President Biden’s infrastructure bill, passed last year, is expected to create jobs in construction and other fields as it directs investment toward bridge rebuilding and airport and port upgrades.“We’re about to go through an era when you don’t need to go through college. That’s going to be a popular story,” he said.Even before the pandemic, people were increasingly questioning the value of a college education. Many people do not complete their degree or certificate programs, leaving them without improved job prospects and often crushing student loan burdens. And higher education alone is not a panacea: Some certificates and qualifications confer much greater labor market benefits, while others offer a smaller wage premium.But data and research continue to suggest that staying in school benefits workers over the long run. Unemployment is consistently lower for people with college degrees, and wages increase notably as education levels climb. The typical worker with only a high school diploma earned $809 a week in 2021, while one with a bachelor’s degree earned $1,334.“The high school job market has been declining since 1983,” Mr. Carnevale said. His research has shown that after the early 1980s, degree holders began to widen their lifetime earnings advantage.The economic resiliency that comes with education is what Luemettrea Williams is banking on. Ms. Williams, 34, has recently transferred to Nashville State as a nursing student.She had been working for years as a medical assistant in a doctor’s office, but got the job because she already knew the doctor; she did not have the relevant credential. Early in the pandemic, the doctor asked her what she would do if he retired, and she realized it was time to return to school. She is working three jobs to pay her tuition, along with her rising gas and grocery bills. She and her 9-year-old daughter have moved in with her aunt, but Ms. Williams is confident she’ll end up with a sturdy career at the end of her two-year program.“That is No. 1: being able to have a stable income where I don’t have to work three jobs to make ends meet,” Ms. Williams said. “I just have to get through these two years, and my life will change.” More

  • 125 Shares109 Views

    in Economy

    Hiring Remains Strong Even as Fed Tries to Cool Economy

    by

    The Labor Department reported 390,000 new jobs in May, as policymakers try to ease inflation without inducing a recession.American employers extended an impressive run of hiring in May, even as policymakers took steps to cool the economy in an effort to ease high inflation.The Labor Department reported Friday that employers added 390,000 jobs, the 17th straight monthly gain. The unemployment rate was 3.6 percent for the third straight month, a touch away from a half-century low.At the same time, the labor force grew by 330,000 people, and the share of adults employed or looking for work continued to edge closer to prepandemic levels.The data signaled that the Federal Reserve’s initial moves to dial back its monetary support for the economy were — at least so far — not constraining business activity so much that hiring was feeling a pinch.After the strong rebound from the depths of the coronavirus lockdowns — all but 800,000 of the 22 million jobs that were lost have been recovered — the Fed has shifted its emphasis from maximum employment to its other mandate: price stability. The challenge is to apply its primary tool, a steady series of interest-rate increases, without inflicting a recession.“I think we’re on sort of what looks like a glide path right now, and that’s good — nothing’s broken,” said Guy Berger, the principal economist at the career-focused social network LinkedIn. “But keep fast-forwarding it a year and the question marks are still big.”The closely watched indicators include the impact on wages, which have been increasing at a pace not seen in decades, though not enough to keep up with inflation over the past year. The Fed is worried that rising labor costs will be passed along to consumers.Wages kept rising across industries.Percent change in average hourly earnings for nonmanagers since January 2019

    Data is seasonally adjusted. Not adjusted for inflation.Source: Bureau of Labor StatisticsBy The New York TimesOn that score, the Labor Department report showed little change in trajectory. Average hourly earnings rose 0.3 percent from the previous month, the same pace as in April, and were 5.2 percent higher than a year earlier, compared with a 5.5 percent year-over-year increase in April.“It’s moderating, but it’s not moderating to a level, I think, where it’s consistent with the Fed’s inflation goals,” said Michael Feroli, chief U.S. economist at J.P. Morgan, said of wage growth. He said the Fed would probably want wages to cool toward an annualized 3.5 percent pace, at the higher end, a rate that officials view as aligned with 2 percent inflation.The State of Jobs in the United StatesJob gains continue to maintain their impressive run, even as government policymakers took steps to cool the economy and ease inflation.May Jobs Report: U.S. employers added 390,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fifth month of 2022.Vacancies: Employers had 11.4 million vacancies in April down from a revised total of nearly 11.9 million the previous month, which was a record.Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.Higher Interest Rates: Spurred by red-hot inflation, the Federal Reserve has begun raising interest rates. What does that mean for the job market?President Biden gave a nuanced celebration of the jobs data in remarks on Friday, emphasizing recent gains while arguing that a slowdown would be welcome, allowing inflation to ease.“The point is this: We’ve laid an economic foundation that’s historically strong,” Mr. Biden said. “Now we’re moving forward to a new moment, where we can build on that foundation, build a future of stable, steady growth so that we can bring down inflation without sacrificing all of the historic gains that we have made.”Stocks declined on Friday and bond yields rose as investors evidently read the report as reinforcing the Fed’s muscular efforts, which risk denting economic growth. “The better the data, the more difficult that a pause or reduced pace of tightening later this year becomes,” analysts at TD Securities wrote in a research report published after the jobs numbers were released.The continued job gains are among many indications of a vibrant economy. Reports from the nation’s largest banks show checking accounts are still above 2019 levels for nearly all income groups. New bankruptcies and debt-collection proceedings are both at their lowest levels since tracking began in 1999.Yet those encouraging trends have been at odds with the generally sour national mood, dominated by inflation concerns. U.S. consumer sentiment declined in early May to the lowest since 2011, according to the University of Michigan.The unemployment rate stayed flat in May.The share of people who have looked for work in the past four weeks or are temporarily laid off More

  • 100 Shares179 Views

    in Economy

    What Higher Interest Rates Could Mean for Jobs

    by

    Layoffs are up only minimally, and employers may be averse to shedding workers after experiencing the challenges of rehiring.The past year has been a busy one for nearly every industry, as a reopening economy has ignited a war for talent. Unless, of course, your business is finding jobs for laid-off workers.“For outplacement, it’s been a very slow time,” said Andy Challenger, senior vice president of the career transition firm Challenger, Gray & Christmas. But lately, he has been getting more inquiries, in a sign that the market might be about to take a turn. “We’re starting to gear up for what we anticipate to be a normalization where companies start to let people go again.”Spurred by red-hot inflation fueled partly by competition for scarce labor, the Federal Reserve has begun raising interest rates in an effort to cool off the economy before it boils over. By design, that means slower job growth — ideally in the form of a steady moderation in the number of openings, but possibly in pink slips, too.It’s not yet clear what that adjustment will look like. But one thing does seem certain: Job losses would have to mount considerably before workers would have a hard time finding new positions, given the backlogged demand.So far, the labor market has revealed some clues about what might lie ahead.Challenger’s data, for example, shows that announced job cuts rose 6 percent in April over the same month in 2021. While still far below levels seen earlier in 2020, it was the first month in 2022 to have a year-over-year increase, and followed a 40 percent jump in March over the previous month. Some of those layoffs were idiosyncratic: More than half the layoffs in health care in the first third of this year resulted from workers’ refusal to obey vaccine mandates, with some of the rest stemming from the end of Covid-19-related programs.But other layoffs seem directly related to the Fed’s new direction. Nearly 8,700 people in the financial services sector lost jobs from January through April, Challenger found, mostly in mortgage banking. Rising rates for home loans have torpedoed demand for refinances, while prospective buyers are increasingly being priced out.Theoretically, a Fed-driven housing slowdown might in turn tamp down demand for construction workers. But builders bounced back strongly after a dip in 2020 and have only accelerated since. The National Association of Home Builders estimates that the industry needs to hire 740,000 people every year just to keep up with retirements and growth. Even if housing starts fell off, homeowners feeling flush as their equity has risen would snap up available workers to add third bedrooms or new cabinets.“A big national builder that’s concentrated in a high-cost market, and all they do is single-family exurban construction, yeah, they may have layoffs,” said the association’s chief economist, Robert Dietz. “But then remodelers would come along and say, ‘Oh, here’s some trained electricians and framers, let’s go get them.’”The National Association of Home Builders estimates that the industry needs to hire 740,000 people every year just to keep up with retirements and growth.Matt Rourke/Associated PressAnother sector that is typically sensitive to the cost of credit is commercial construction, which sustained deep losses as office development came to a screeching halt during the pandemic. Nevertheless, cash-rich clients have plowed ahead with industrial projects like power plants and factories, while federal investment in infrastructure has only begun to make its way into procurement processes.“I think that lending rates might be less important right now,” said Kenneth D. Simonson, chief economist for the Associated General Contractors of America. “An increase in either credit market or bank rates isn’t sufficient to choke off demand for many types of projects.”The tech sector, which feeds on venture capital that is more abundant in low-interest-rate environments, has drooped in recent months. Under pressure to burn less cash, some companies are looking to offshore jobs that before the pandemic they thought needed to be done on site, or at least in the country.“We’ve seen several of our clients in the high-growth technology space quickly shift their focus to reducing cost,” said Bryce Maddock, the chief executive of the outsourcing company TaskUs, discussing U.S. layoffs on an earnings call last week. “Across all verticals, the operating environment has led to an acceleration in our clients’ demand for growth in offshore work and a decrease in demand for onshore work.”In the broader economy, however, any near-term layoffs might occur on account of forces outside the Fed’s control: namely, the exhaustion of federal pandemic-relief spending, and a natural waning in demand for goods after a two-year national shopping spree. That could hit manufacturing and retail, as consumers contemplate their overfilled closets. Spending on long-lasting items has fallen for a couple months in a row, even before adjusting for inflation.If spending on durable goods declines sharply, “I could easily see that creating a recession, because suppliers would be stuck with a massive amount of inventory that they wish they didn’t have, and people employed that they wish they didn’t,” said Wendy Edelberg, director of the Hamilton Project, an economic policy arm of the Brookings Institution. “Even there, it’s going to be hard to know how much was that the Fed raised interest rates, and how much was the extraordinary surge in demand for goods unwinding.”In general, if the Fed’s path of tightening does prompt firms to downsize, that’s likely to be bad news for Black, Hispanic and female workers with less education. Research shows that while a hot labor market tends to bring in people who have less experience or barriers to employment, those workers are also the first to be let go as conditions worsen — across all industries, not just in sectors that might be hit harder by a recession.So far, initial claims for unemployment benefits remain near prepandemic lows, at around 200,000 per week. But some economists worry that they might not be as good a signal of impending trouble in the labor market as they used to be.The share of workers who claim unemployment, known as the “recipiency rate,” has declined in recent decades to only about a third of those who lose jobs. These days, any laid-off workers might be finding new jobs quickly enough that they don’t bother to file. And the pandemic may have further scrambled people’s understanding of whether they’re eligible.“One possibility is that people are going to think that because they haven’t worked long enough, because they switched employers or stopped working for a period of time, that this would make them ineligible, and they’re going to assume that they can’t get it again,” said Kathryn Anne Edwards, a labor economist at the RAND Corporation. (The other possibility is that the temporary supplements to unemployment insurance during the pandemic might have introduced more people to the system, leading to more claims rather than fewer.)One good sign: Employers may have learned from previous recessions that letting people go at the first sign of a downturn can wind up having a cost when they need to staff up again. For that reason, managers are trying harder to redeploy people within the company instead.John Morgan, president of the outplacement firm LHH, said that while he was getting more inquiries from companies preparing to downsize, he did not expect as large a surge as in past cycles.“Even if they’re driving down on profits, a lot of our customers are trying to avoid the ‘fire and rehire’ playbook of the past,” Mr. Morgan said. “How can they invest in upskilling and reskilling and move talent they have inside the organization? Because it’s just really hard to acquire new talent right now, and incredibly expensive.” More

  • 125 Shares99 Views

    in Economy

    April Jobs Report: Gain of 428,000 Shows Vibrant Labor Market

    by

    The Labor Department reported a gain of 428,000 jobs in April, along with a 5.5 percent increase in average hourly earnings from a year earlier.The U.S. economic rebound from the pandemic’s devastation held strong in April with another month of solid job growth.Employers added 428,000 jobs, matching the previous month, the Labor Department reported Friday, with the growth broad-based across every major industry.The unemployment rate remained 3.6 percent, just a touch above its level before the pandemic, when it was the lowest in half a century.The challenge of a highly competitive labor market for employers — a shortage of available workers — persisted as well. In fact, the report showed a decline of 363,000 in the labor force.The economy has regained nearly 95 percent of the 22 million jobs lost at the height of coronavirus-related lockdowns two years ago. But the labor supply has not kept up with a record wave of job openings as businesses expand to match consumers’ continued willingness to buy a variety of goods and services. There are now 1.9 job openings for every unemployed worker.The hiring scramble has driven up wages, and employers are largely passing on that expense, helping fuel inflation that Americans have cited as their leading economic concern. On that front, Friday’s report showed an easing in the acceleration of average hourly earnings, which increased 0.3 percent from the month before, after a 0.5 percent gain in March.President Biden pointed to the latest data as evidence of “the strongest job creation economy in modern times,” a message the White House is increasingly amplifying ahead of the congressional elections.The unemployment rate stayed under 4 percent in April.The share of people who have looked for work in the past four weeks or are temporarily laid off, which does not capture everyone who lost work because of the pandemic. More