US employers added just 236,000 jobs in March, coming in below expectations and indicating that the labor market is cooling off amid the Federal Reserve’s yearlong rate-hiking campaign to chill inflation.
The unemployment rate dropped to 3.5%, according to the March jobs report released Friday by the Bureau of Labor Statistics.
Economists were expecting a net gain of 239,000 jobs for the month and a jobless rate of 3.6%, according to Refinitiv. This is the first jobs report in 12 months that came in below expectations.
While the US labor market has kept trucking along despite other areas of the economy slowing under the weight of interest rate hikes, it is showing some signs of cooling.
March’s total is a notable reduction from February’s upwardly revised 326,000 jobs gained and January’s monster jobs number — originally 517,000 but subsequently revised down to 472,000.
The 236,000 jobs added during March is the smallest monthly gain since a decline in December 2020. Excluding the losses seen during the first year of the pandemic, it’s the smallest monthly jobs gain since December 2019.
However, the job market remains above pre-pandemic norms: Between 2010 and 2019, the economy added an average of 183,000 jobs a month.
President Joe Biden called the March employment report a “a good jobs report for hard-working Americans,” in a statement released Friday morning.
Industries reporting monthly losses included retail trade, temporary help, manufacturing, construction and information services.
“Industries that were facing acute labor shortages, particularly hospitality, are really making gains in getting the workforces back that they needed to,” Jim McCoy, senior vice president at ManpowerGroup, told CNN. “We saw some moderation in a few other sectors like government, like health care and then pretty much stability across most of the rest of the sectors. You have a few drops — retail dropped 15,000 — but in the grand scheme of things, I wouldn’t consider that an alarming drop at all; that’s just a normal wobble within a course of a month.”
Employment in leisure and hospitality still has yet to recover to pre-pandemic levels. Through March, the industry was about 368,000 jobs, or nearly 2.2%, shy of February 2020 employment levels, an analysis of BLS data shows.
Source: CNN Business
2. The American Job Market: Strong And In Harmony
Although 236,000 is considerably lower than the mind-boggling numbers of the previous two years – to which we’ve become accustomed and by which we’ve become spoiled – it’s still a great number, especially in light of the Fed’s attempt to cool off the economy, which would, by nature, slow down hiring and raise unemployment while bringing down inflation.
The Job Openings and Labor Turnover Survey (JOLTS) – and the Employment Situation Summary – tell much of the story.
The number of open jobs in America dropped by a significant 672,000, to a 21-month low of 9.9 million, and is 2.1 million fewer than its all-time high of 12.1 million in March 2021. This, like the unemployment rate, is a stat we’d like to see decrease; it means employers are actually filling those open jobs – and that will lead to productivity and growth. At the same time, the hires, turnover, and voluntary quits rates are all holding steady and just shy of historic highs, while the layoffs rate remains at its historic low of 1.0%, that in spite of alarming layoffs in the tech sector. Factored together, the layoffs rate is considerably lower across the entire job market.
Further, when we look for patterns, we see more outstanding results. For instance, while the civilian noninstitutional population grew by 160,000 in March, the civilian labor force grew by three times that, 480,000, proof of those open jobs getting filled, and the leading reason for unemployment coming back down to 3.5%. Concurrently, the number of employed persons rose by 577,000 while the number of unemployed fell by 97,000. That’s a net improvement of 674,000 in March.
And once again, a look across employment sectors shows widespread and shared growth. Job gains were registered in leisure and hospitality (72K), government (47K), professional and business services (39K), health care (34K), social assistance (17K), and transportation and warehousing (10K). Retail lost 15,000 jobs, not surprisingly. All other sectors recorded little or no change.
And finally, average hourly earnings for all employees on private nonfarm payrolls rose by 0.3% in March, extending the 12-month trend to 4.2% over the past 12 months.
While March’s numbers came nowhere close to the spectacular performance of the previous 26 months, it is still a solid report in which every factor is positive.
Source: Forbes
3. ChatGPT may be coming for our jobs. Here are the 10 roles that AI is most likely to replace
Amazon employees who tested ChatGPT said it does a “very good job” of answering customer support questions, is “great” at making training documents, and is “very strong” at answering queries around corporate strategy.
However, users of ChatGPT also found that the bot can generate misinformation, incorrectly answer coding problems, and produce errors in basic math.
While a 2013 University of Oxford study found that 47% of US jobs could be eliminated by AI over the next 20 years, that prediction appears to have been off-base. A recent Goldman Sachs study found that generative AI tools could, in fact, impact 300 million full-time jobs worldwide, which could lead to a “significant disruption” in the job market.
Still, Anu Madgavkar, a partner at the McKinsey Global Institute, said that human judgement needs to be applied to these technologies to avoid error and bias, she told Insider.
“We have to think about these things as productivity enhancing tools, as opposed to complete replacements,” Madgavkar said.
Tech jobs (Coders, computer programmers, software engineers, data analysts)
Coding and computer programming are in-demand skills, but it’s possible that ChatGPT and similar AI tools may fill in some of the gaps in the near future.
Media jobs (advertising, content creation, technical writing, journalism)
Media jobs across the board — including those in advertising, technical writing, journalism, and any role that involves content creation — may be affected by ChatGPT and similar forms of AI, Madgavkar said. That’s because AI is able to read, write, and understand text-based data well, she added.
Legal industry jobs (paralegals, legal assistants)
Generative AI may most likely affect legal workers in the US, a recent Goldman Sachs report found.
Teachers
Teachers across the country are worried about students using ChatGPT to cheat on their homework, but according to Pengcheng Shi, an associate dean in the department of computing and information sciences at Rochester Institute of Technology, they should also be thinking about their job security.
Finance jobs (Financial analysts, personal financial advisors)
Like market research analysts, financial analysts, personal financial advisors, and other jobs in personal finance that require manipulating significant amounts of numerical data can be affected by AI, Muro, the researcher at The Brookings Institute, said.
Traders
Experts say ChatGPT could upend jobs across a range of Wall Street industries, from trading to investment banking.
Graphic designers
In a December Harvard Business Review post, three professors pointed to DALL-E, an AI tool that can generate images in seconds, as a potential disruptor of the graphic design industry.
Accountants
Accounting is generally viewed as a stable profession, but even employees in this industry could be at risk.
Customer service agents
You’ve probably already experienced calling or chatting with a company’s customer service, and having a robot answer. ChatGPT and related technologies could continue this trend.
Source: Insider
4. The class of 2023 is graduating into a challenging job market
Some companies are curbing their plans to hire new grads or cutting internship programs, and the unemployment rate for college graduates between ages 20 and 24 most recently registered 4.6%, double its level at the end of 2021. On top of that, student loan repayment is expected to resume soon, so for many, finding a source of stable income is a high priority.
Lindsay Ellis is a reporter with The Wall Street Journal. She joined Marketplace’s Reema Khrais to talk about what it’s like for the class of 2023 to be entering the workforce right now. The following is an edited transcript of their conversation.
Reema Khrais: So you’ve been talking to soon-to-be college grads about their job prospects, about how they’re feeling. What sorts of stories are you hearing?
Lindsay Ellis: Yeah, it’s been a range. I spoke with one student who has applied to between 50 and 100 jobs. She’s at Texas A&M, and she hasn’t really gotten a lot of traction. I’ve also talked to other students who, you know, maybe have found success or have gotten some interviews, but it’s not exactly in the field or the exact role that they had thought about when they initially started their job search. One thing that I’ve been hearing is that students are more willing to cast a wider net in response to some of the labor news and the jobs news that we’ve all been following over the last stretch. And so, while I think — to take a step back — there are jobs, it is a longer journey than many soon-to-be college grads would like.
Khrais: We know that the first job out of college can be pretty critical to starting your climb up the job ladder. What kind of long-term impact might we see from this?
Ellis: It’s a great question. You know, there has been some research about graduates who enter the workforce in a recession and that their earnings lag graduates who don’t enter into a recession. But the U.S. is not technically in a recession right now, so I think that’s sort of speculative at this point.
Khrais: Yeah. And I want to briefly touch on student loans. The pause on repayment is almost over. How much of a factor do you think that that is for new grads as they’re searching for jobs?
Ellis: So when I talk to young professionals and students, you know, salary is definitely high on the list of areas that are really important to them. But many grads are really looking for a company that will offer stability. And yes, I mean, salary is key — especially for those who have taken on debt and will need to start repaying those loans. But grads who I talked to are really hoping to land at a company [where] they will, you know, hopefully be shielded from layoffs or contractions.
Khrais: Given what we know — I mean, obviously, there’s a lot we just don’t know of what’s to come — what would your advice be to new grads or soon-to-be grads?
Ellis: I’m not really in the advice business. But I will say that, you know, the grads that I talked to, they are working really hard to get that first position. I mean, working just any possible connection to get a foot in the door or to get a conversation. And others, you know, we see all of these LinkedIn posts from folks who have been recently laid off and that get traction. So some soon-to-be grads are doing the same thing, saying, “Hey, graduation is coming up. Here’s where I am in the search.” And one person who I talked to said that such a viral post can lead to connections with alums or recruiters.
Source: Marketplace
5. US services sector growth slows; price pressures abating
The Fed is contemplating pausing the U.S. central bank’s fastest interest rate hiking cycle since the 1980s.
“The Fed wants this and needs this,” said Jennifer Lee, a senior economist at BMO Capital markets in Toronto. “Slower growth, slower demand for services, slower demand for workers, and slower inflation. We’re getting there.”
The Institute for Supply Management (ISM) said its non-manufacturing PMI fell to 51.2 last month from 55.1 in February. A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy.
Economists polled by Reuters had forecast the non-manufacturing PMI decreasing to 54.5. Despite the pullback in growth in the services sector, Anthony Nieves, chair of the ISM Services Business Survey Committee noted that “the majority of respondents report a positive outlook on business conditions.”
The PMI remains above the 49.9 level which the ISM says over time indicates growth in the overall economy. Nevertheless, the softer-than-expected reading, coming on the heels of continued weakness in manufacturing activity last month, increases the risk of a recession this year.
The ISM reported on Monday that its manufacturing PMI fell in March to the lowest level since May 2020. It was the first time since 2009 that all subcomponents of the manufacturing PMI fell below the 50 threshold.
Thirteen services industries reported growth, including arts, entertainment and recreation, accommodation and food services, public administration and mining as well as utilities, construction and information.
Finance and insurance, wholesale trade and retail trade were among the five industries reporting a decline. The services sector is being supported by consumers switching spending from goods, which are typically bought on credit.
Source: Reuters
