The job market is beginning to cool off: According to the most recent Job Vacancies and Labor Turnover Summary from the Labor Department, there were fewer job openings in June but near-record numbers of workers continued to leave their jobs and be employed for new positions.
Even while there were fewer job postings in June than there were in May (11.3 million vs. 10.7 million), the number of openings is still much greater than it was a year earlier and more than 50% more than it was prior to the pandemic. Despite the decline, there are still about 1.8 vacant positions for every unemployed person.
While this is happening, employees are still influencing the market and moving the needle: 6.4 million people were employed for new positions, while 4.2 million left their employment of choice voluntarily, dropping off from record highs but remaining very high.
According to Nick Bunker, director of economic analysis at Indeed Hiring Lab, the job market cooling is “far from a plunge.”
“The labor market is loosening a bit, but by any standard it is still quite tight,” Bunker adds. “The outlook for economic growth may not be as rosy as it was a few months ago, but there’s no sign of imminent danger in the labor market.”
People are troubled by the thought of what’s to come, but that doesn’t stop them from quitting now
Although many workers are considering quitting their jobs today, they are becoming increasingly anxious about having their pick of employment in the upcoming months. 2.8% of the workforce made up of employees who quit their employment voluntarily in June.
Compared to May, workers’ confidence in the job market marginally declined in June and July, according to a ZipRecruiter indicator that tracked attitudes among 1,500 people. The survey also revealed a rise in job seekers who anticipate fewer openings in the labour market six months from now, a decline in those who believe their job search is going well, and a marginal rise in those who feel financial pressure to accept the first job offer they are presented with.
People may also be alarmed by recent announcements of layoffs, hiring freezes, and revoked job offers from well-known corporations, particularly those in the tech and housing sectors that had expansion during the Covid era.
Bunker is aware that “there are pockets of the economy and labor market going through turbulence,” he says, “but they’re for the most part concentrated pockets.”
Additionally, it’s possible that these workers are being given new employment relatively rapidly. In June, the unemployment rate in the country remained constant at 3.6 percent.
When it comes to the future, Bunker anticipates that the Friday jobs report will show rising payrolls and increased employment. “If you’re thinking of switching jobs, it’s still a good time,” he says, noting that job seekers may concentrate more on choosing a field, company, or sector with a “strong economic outlook.”
Hiring slowdown does not necessarily signal a recession
Despite the positive labour market, economists and consumers are both concerned about a possible recession.
“We have a paradox in our economy because of conflicting signals,” says Andrew Flowers, a research director at Recruitonomics and a labour economist at Appcast.
For instance, the proportion of people applying for unemployment insurance has increased during the past few weeks. However, according to the Labor Department’s statistics, layoffs remained at a record-low level of just under 1% in June.
Bunker claims that inflation worries are probably to cause, while explanations for “heightened concern about a recession have not fully materialized yet.”
According to Flowers, the most recent job statistics point to a slowdown in the economy rather than a recession. Even yet, there may not be widespread layoffs as a result of decreasing hiring demand.
“Should people be worried? Right now, it’s unclear,” Flowers says. “My message to job-seekers and workers is that it’s not clear this economic slowdown will result in a material increase in unemployment.”
He further says, “As the economy shifts to a lower gear of growth, which is the Fed’s intention, that doesn’t mean we’ll suddenly have 10% unemployment.”
