- Indeed's Nick Bunker said we were settling into an era of “more boring labor markets”.
- Business Insider looked at how components of the labor market are calming, including wage growth.
- “Job seekers still have some bargaining power,” Bunker said, but added: “More employees are staying.”
If you've recently joined the workforce, you may be curious about what happened to the sky-high job openings, mass turnover during mass retirements, and rapid wage growth.
Indeed, the labor market resembles the healthy but boring days of 2018 or 2019, Nick Bunker, director of North American economic research at Indeed Hiring Lab, told Business Insider. This is in contrast to the wild fluctuations seen during the COVID-19 pandemic.
Mr. Bunker said there was less drama in the employment figures.
“That's a good thing in my opinion” given an “incredibly dramatic” few years, Bunker said.
However, employment growth remains strong. The U.S. just added 303,000 jobs in March, a slower pace than at the height of the pandemic recovery.
Wage growth has slowed. The share of Americans working or looking for work has remained roughly flat since spring 2023. The number of job offers is also decreasing, and the rate is 5.3% for the third consecutive month. The number of layoffs and layoffs is low.
And a duller but more stable labor market could be great news for workers and job seekers. Julia Pollak, chief economist at ZipRecruiter, told Business Insider that minimal change is great in a resilient, stable and solid labor market.
“Everything is going better than most expected,” Pollack said.
Pollack pointed to the strength in employment in construction and manufacturing. Construction employment rose 7.8% in March compared to pre-pandemic levels in February 2020. Manufacturing employment increased by 1.4%, and employment was unchanged from February of this year to March of this year.
After the sharp swings in the early days of the pandemic, the long-feared recession has not yet arrived, and may even be a long way off. “I think stability is commendable in a time of high interest rates and restrictive monetary policy that is expected to lead to losses and declines,” Pollack said. “And most of the recent small changes are in the right direction.”
The United States may find itself in a Goldilocks job market. His four graphs below show this.
To quit a job
people looking for something new Although jobs have bargaining power, workers are likely to stick with their current jobs.
“Job seekers still have some bargaining power, but they are less willing to exercise that power by quitting their jobs,” Bunker said. “More employees are staying with their companies because there are fewer new job opportunities and fewer salary increases when changing roles. However, layoff rates remain low, so employees are have strong job security compared to the level of
Newly released data for February shows that the U.S. job turnover rate remained at 2.2% for the fourth consecutive month. This rate is down from 3.0% in April 2022. In February, 3.5 million people quit, but a BLS news release said the metric remained “virtually unchanged.”
wage growth
Average hourly wages increased by 4.1% from March 2023 to March of this year, but this was lower than the roughly 6% year-over-year increase in March 2022.
Despite this slowdown, wages have recently grown faster than prices, meaning workers have more purchasing power.
“This means real money going into the pockets of working families,” Acting Secretary of Labor Julie Su told Business Insider. “That's exactly what we wanted to see.”
Inflation, as measured by the year-on-year change in the consumer price index, rose slightly last month, but remains less of a problem than last year. From March 2023 to March 2024, it increased by 3.5%, but from February 2023 to February 2024, it increased by 3.2%.
Given slowing wage growth, the Fed may be more inclined to lower interest rates later this year. Pollack said the slowdown in wage growth is “good news for the Fed, which is still battling inflation.”
According to the 12-month moving average of median wage increases from the Atlanta Fed's Wage Growth Tracker, job changers have higher wage increases than stayers.However, wage growth has slowed in both countries. Those who change jobs and those who stay.
“While nominal wage growth may be slowing, real wage growth, which really matters for workers' purchasing power, remains positive and high,” Pollack told BI. “Job changers and current workers are still experiencing solid real wage growth and clearly retain much of the leverage they gained during the pandemic. They are getting hired, negotiating offers, and “We are receiving a counter-offer from our old employer's desire to maintain employment at historically high levels.” ”
unemployment insurance claim
Initial claims for unemployment insurance serve as an indicator of layoffs and spike when many people lose their jobs. For now, the disgustingly low rate of initial benefit claims suggests that large-scale layoffs of any kind have yet to occur.
First-time claims decreased from the week ending March 30 to the week ending April 6. Compared to the high levels of weekly claims during the pandemic, initial claims have been generally low so far this year.
“Despite much speculation that hiring is slowing, recent numbers, including job openings and new unemployment claims, continue to show that the U.S. labor market is stabilizing,” said Eugenio Aleman, chief economist at Raymond James. It shows that there is.” Notes from the beginning of this month.
unemployment
The unemployment rate was 6.4% as of January 2021, after spiking to double digits during the spring 2020 pandemic closures. It fell to 3.8% in March of this year, slightly above the historically low rate seen for most of the past two years.
Moreover, there has been a less dramatic change in the number of people who have gone from employed to unemployed. This number has been around 1.5 million each of the past few months.
So what will happen to the Goldilocks job market?
“It would be great to live in a world where unemployment is low, wage growth is stable and consistently high, and more people are entering the labor market,” Bunker said. “Hopefully, the dramatic days are behind us and there will be significant benefits for workers and job seekers. But it doesn't feel like a disruption.”
Although job openings, wage growth, and hiring rates are depressed, the overall labor market is more Goldilocks-like: neither too hot nor too cold.
“The labor market is strong and there is a path to sustainable growth ahead,” Bunker said.
Juliana Kaplan contributed reporting.
