Workers are still reaping the benefits of a hot labor market characterized by few layoffs, plenty of jobs and a high level of voluntary departures, according to U.S. Labor Department data released Wednesday. The numbers reveal that the pandemic-era trend known as the “Great Resignation” is still in full swing despite fears of a U.S. recession, although it is showing some signs of leveling off, labor economists said. “Broadly speaking, this doesn’t look like a job market that’s going into a recession,” said Daniel Zhao, senior economist at career website Glassdoor. “Labor demand is still extremely hot, and even if things are cooling off white-hot, they’re still hot. More from Personal Finance: Buying carbon-conscious funds after Supreme Court’s EPA ruling White House plans sweeping changes to student loan system Luxury car buyers pay more than ever “I think the question on everyone’s mind, though, is whether this will continue,” Zhao added.
Job openings and “resignations” near record highs
A Help Wanted sign in Patchogue, New York, on August 24, 2021. Steve Pfost/Newsday RM via Getty Images There were nearly 11.3 million jobs on the last business day of May, the Labor Department said on Wednesday. Jobs – a gauge of employer demand for labor – fell from about 11.7 million in April and from a record high of 11.9 million in March. However, they are still high in historical terms and are hovering near their end-2021 level. In addition, workers are leaving their jobs at near-record levels. About 4.3 million people voluntarily quit their jobs in May, about the same as in April and slightly below the peak (over 4.4 million) in March. “The dropout rate was 100 [miles per hour] on the highway; it’s slowed down, but it’s still doing 90,” said Nick Bunker, economist at Indeed. “It’s still pretty fast, just not as fast as it was.” This Big Quit trend has been central to the job market since the beginning of 2021. It has even entered the public through so-called “QuitToks” on the social networking site TikTok and a Beyonce song released in June, for example. In large part, the workers who leave find work elsewhere, lured by factors such as higher pay, according to economists. Wages in May rose 6.1 percent from a year earlier, the biggest annual increase in more than 25 years, according to the Federal Reserve Bank of Atlanta.
The historically low unemployment rates continue
Layoffs were also near record lows in May. The jobless rate – which measures layoffs during the month as a percentage of total employment – was unchanged at 0.9% in May, the Labor Department said on Wednesday. Before the pandemic, 1.1% was the lowest unemployment rate in the country. May marked the 15th straight month in which layoffs were below the pre-pandemic record — a sign that employers are holding on to existing workers, Bunker said. It is still the job seeker’s job market. Workers still have a lot of bargaining power. Nick Bunker economist at Indeed Meanwhile, the unemployment rate of 3.6% is approaching the pre-pandemic level of 3.5% in early 2020. This was the lowest unemployment rate since 1969. “It’s still the job market for job seekers,” Bunker said. “Employees still have a lot of bargaining power. “They may have lost some leverage from a few months ago, but we haven’t seen a significant change there yet.”
A slowdown may be ahead
While the labor market has been a bright spot in the pandemic-era economic recovery, there are signs things may be cooling — though it’s unclear how much and how quickly, economists said. The Federal Reserve is raising borrowing costs for consumers and businesses in an effort to slow the economy and tame stubbornly high inflation. In addition, the latest inflation reading was higher than expected and the latest retail sales data was weaker than expected, Glassdoor’s Zhao said. “We know explicitly that the Federal Reserve is trying to calm the economy,” Zhao said. “One of the places that’s going to happen is in the labor market. “Things may slow down as the labor market cools, but right now we’re still very much in the Great Recession,” he added.
