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Workers are still reaping the benefits of a hot labor market characterized by fewer layoffs, plenty of job opportunities and a high level of voluntary departures, according to US Department of Labor 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 recession in the United States, although it is showing some signs of stabilization, labor economists said.
“Overall, this doesn’t look like a job market is about to slide into a recession,” said Daniel Chow, chief economist at employment website Glassdoor. “Labour demand is still very hot, and even if things are starting to cool off from the white heat, it is still very hot.
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“I think the question on everyone’s mind is whether this will continue,” Zhao added.
Job opportunities and ‘resignations’ are near record levels
A “Help Wanted” sign is seen in Patchoug, New York, on August 24, 2021.
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The Labor Department reported Wednesday that there were approximately 11.3 million jobs available on the last working day of May.
Jobs – a proxy for employers’ demand for labor – fell from about 11.7 million in April and 11.9 million in March. But it is still historically high and hovering near its level in late 2021.
In addition, workers have quit their jobs at near-record levels. About 4.3 million people voluntarily left their jobs in May, a level close to April and slightly down from their peak (more than 4.4 million) in March.
“The quit rate was 100 [miles per hour] On the highway Nick Bunker, the site’s actually working economist, said, “It’s slowed down but still hit 90. Still pretty fast, but not as fast as it used to be.”
This great quitting trend has been a focus of the job market since early 2021. It even got into the zeitgeist via so-called “QuitToks” on social networking site TikTok and a Beyoncé song released in June, for example.
To a large extent, workers who leave find jobs elsewhere, tempted by factors such as higher wages, according to economists. Wages in May jumped 6.1% from the previous year, the largest annual increase in more than 25 years, according to the Federal Reserve Bank of Atlanta.
Historically low layoffs continue
Layoffs also approached record lows in May. The Labor Department said on Wednesday that the layoff rate – which measures layoffs during the month as a percentage of total employment – was unchanged at 0.9% in May.
Before the pandemic, 1.1% had the lowest layoffs rate in the country. May was the 15th straight month in which layoffs were below this previous record for the pandemic — an indication that employers are retaining their existing workers, Bunker said.
Meanwhile, the unemployment rate of 3.6% is close to its pre-pandemic level in early 2020, when it was 3.5%. This was the lowest unemployment rate since 1969.
“The job market is still for job seekers,” Bunker said. “The workers still have a lot of bargaining power.
“Maybe they lost a little bit of leverage a couple of months ago, but we haven’t seen much change there yet.”
There may be a slowdown in the future
While the job market has been a bright spot in the economic recovery in the era of the pandemic, there are indications that things may be calming down — although 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. Moreover, the latest inflation reading came in higher than expected, and the latest retail sales data was weaker than expected, Glassdoor’s Zhao said.
“We clearly know that the Fed is trying to calm the economy,” Zhao said. “One of the places that will happen is the job market.
He added, “Things may slow down as the labor market slows, but at the moment we are still in the stage of major resignations.”