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The U.S. job market has stagnated recently, with both good news and bad news for American workers.
However, economists say employees are less likely to lose their jobs because companies are retaining their existing workforces. But job seekers may have a hard time finding new jobs, economists say, as employers hold back on hiring.
It’s a “low-employment, low-fire environment,” Bank of America economists said in a research note Friday.
“The labor market is currently characterized by low turnover, which means soft hiring and low layoffs,” they said.
This news may be disappointing for many workers. About half, or 51%, of U.S. employees were looking for a new job as of Nov. 1, the highest percentage since 2015, according to a Gallup poll released Tuesday. Overall job satisfaction was found to be at an all-time low.
“The Great Resignation” became “The Great Remain”
By many measures, the job market is strong for American workers.
The unemployment rate in November was 4.2%, near a historic low since the late 1940s. The layoff rate in October was also the lowest since records began in the early 2000s, and has remained largely unchanged since 2021.
However, employer hiring was weak in October, with the employment rate at its lowest since 2013. The average length of unemployment was 23.7 weeks in November, up from 19.5 weeks in the same period last year.
Julia Pollack, chief economist at ZipRecruiter, said the current lack of dynamism in the job market represents whiplash for many workers.
Workers left their jobs at a breakneck pace in 2021 and 2022 as the U.S. economy emerges from pandemic-era hibernation. The number of job openings has soared to record highs, companies are competing for workers by raising wages at the fastest pace in decades and encouraging workers to leave their jobs in search of better opportunities. urged.
The era known as the “Great Resignation” has been replaced by the “Great Remain,” Pollack said.
Labor economists say this is due to a variety of factors.
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Corey Stahl, an economist at job site Indeed, said many companies, hurt by recent experiences in retaining workers amid intense labor competition, are responding by “hoarding labor.” said.
Employers are shifting to focus on retention rather than recruitment, Pollack said.
The labor market is also gradually cooling down.
The US Federal Reserve has aggressively raised borrowing costs starting in 2022 to slow the economy and curb inflation, putting the brakes on the job market. The central bank began cutting interest rates in September as inflation fell significantly and the labor market issued some warning signals.
“Diversifying” labor market
Staehle said the overall situation is strong, but the job market for workers is “diversified.”
While overall job growth is “robust,” the bulk of the job growth is occurring in a handful of industries, including health care, government, and leisure and hospitality, Stahle said.
Meanwhile, employment growth in white-collar fields such as software development, marketing and media communications is “very, very slow,” he said. “At the moment, your experience in the labor market depends on the type of work you’re doing,” he said.
Economists said employment could rebound if the Fed continues to lower interest rates because lower borrowing costs tend to encourage employers to invest more in business.
In the meantime, “the situation is going to be a little bit more competitive than it was a few years ago,” Staehle said.
Job seekers need to ensure their resumes match the skills employers list on job postings, especially since many companies use “applicant tracking systems” to automatically review applications. he said.
“People who really want to go out [of their job] You may need to broaden your search, expand your parameters, get a little uncomfortable and re-hone your skills,” Pollack said.
But people in jobs they truly love, she says, “have unprecedented job security.”
