The past few months have been dominated by headlines of layoffs at high-profile companies, particularly in the tech industry.
But on Friday morning, the Bureau of Labor Statistics reported that the US added 517,000 jobs in January, while the unemployment rate fell to 3.4%, the lowest in five decades. In total, 5.7 million American workers remain unemployed, the lowest number since 2000.
As University of Michigan economist Justin Wolfers noted in a tweet after the jobs report was released Friday morning: «Real America is getting back to work.»
«The job market is pretty strong,» Elise Gould, a senior economist at the left-leaning nonprofit Economic Policy Institute, said in an interview ahead of Friday’s report. «The unemployment rate is low and there are still people who have not returned to the job market after the pandemic, so we can hope that the workforce can grow. But we have had an incredible couple of years of recovery.»
Additional data this week showed the strength of the labor market: There was more than 11 million vacancies in the economy in Decemberand the weekly count of people filing for first-time unemployment benefits has dropped to 183,000. a minimum of nine months.
The job increases go against the announcements of some brand-name companies in Silicon Valley. A handful of tech companies including Amazon, Google-parent Alphabet, Facebook-parent Meta, Salesforce, IBM, Intel, Microsoft, Salesforce, Twitter and others have cut thousands of jobs in recent months.
Layoffs are brutal, life-altering events. But there is evidence that many of those who have lost their jobs have been able to get new ones in a relatively short period of time.
A recent ZipRecruiter survey conducted in the last three months of 2022 found that more than half of newly hired workers found their job within a month of searching, and more than 4 in 5 found their job within three months.
Even in the hardest-hit tech industry, recoveries have been strong: ZipRecruiter found that among workers recently laid off from a tech job, 37% found a new job within a month and 79% found a new job within three months.
Where are companies hiring right now?
Among those bringing in new workers right now:
- Planes and airlines, including Alaska Airlines, american airlines, Boeing, delta airlines, southwest airlinesand united airlines
- Bloomberg L.P., who is hiring 1,000 new workers
- chipotle, what Announced seeks 15,000 new workers
- general motors told the Detroit Free Press that while this won’t be a «big» hiring year for the automaker, it continues to look for tech talent, especially among laid-off people in Silicon Valley.
- The United States Postal Service is hiring 2,400 workers in California
The strength of Friday’s jobs report caught most economists by surprise, even those who had dismissed the idea that the United States was on the brink of recession.
But at least one group heralded the ongoing jobs boom. The consultant Robert Half Announced this week that a survey of 2,000 hiring managers showed that 58% anticipated adding new permanent roles during the first half of the year, up from 46% just six months ago.
In fact, technology (64%) and finance and accounting (62%) managers saw the greatest needs for full-time staff. The survey found that 72% of managers plan to hire more contract professionals in the first half of 2023, up from 45% six months ago.
“Hiring tends to pick up early in the year as budgets have been approved and teams seek additional support for initiatives that will drive business growth and customer retention,” said Paul McDonald, Robert Half’s senior managing director, it’s a statement.
«As job openings and turnover remain high, employers must play offense, and be prepared to negotiate, to recruit and retain qualified talent.»
How did we get to this point?
Julia Pollak, chief economist at ZipRecruiter, says the economy is returning to a more «balanced» distribution of job growth after the pandemic led to mass layoffs in leisure and hospitality, but there has been a rebound in sectors like warehousing and delivery.
Health care, he said, will be at the forefront, as evidenced by the sector adding 70,000 to 80,000 new jobs each month since last June.
“The economy is returning to normal, where job growth is not only determined by recovery from the pandemic, but by longer-term forces like demographics and technological change, which will also be more enduring,” Pollak said in a recent interview.
Green jobs such as solar and wind energy technicians, spurred in part by President Joe Biden’s multi-billion dollar Inflation Reduction Act, are also likely to see outsized growth.
And in Sun Belt states like Texas and Florida, job growth will be faster than in other parts of the country, Pollak said. Georgia, Kentucky, and Michigan are on their way to land large electric battery factories that will build the components that power electric vehicles.
Many economists believe a «soft landing» scenario is in play for the US economy, in which inflation slows while job losses remain low and corporate profits remain strong. A key element to that scenario, at least in the minds of economists, is wage and profit growth. Friday’s report showed that the average hourly earnings of the lowest-paid workers rose just 0.25%, the smallest increase since January 2021.
Slowing wage growth is not good news for workers. In fact, their inflation-adjusted “real” wage gains for much of the pandemic and the post-pandemic period have been negative because price growth has been so fast.
But EPI’s Gould said that as inflation continues to fall, workers are likely to continue to see real gains in their earnings.
«Hopefully they catch up with the higher inflation we’ve seen in the past year,» he said.