US employers added 253,000 jobs in April showing jobs market remains robust
US employers added 253,000 jobs in April, a sign that resilient jobs market remains robust even after a year of Federal Reserve interest rate rises.
Labor market growth has been slowing over the last few months, from 472,000 jobs in January to a revised 165,000 in March. April broke that downward trend in growth, the Bureau of Labor Statistics (BLS) reported on Friday.
The unemployment fell slightly increased to 3.4%, 0.1% decrease compared to March.
Economists had expected the US to add 180,000 jobs over the month. Recent data had pointed to signs that jobs growth has been slowing. The monthly Job Openings and Labor Turnover Survey, known as Jolt, for March was released by the BLS earlier this week and showed job openings were at their lowest level since April 2021, falling for a third month straight.
Layoffs increased to 1.8m, 248,000 more compared to last month and the highest number since December 2020. The construction industry saw the highest number of layoffs as the housing market has cooled with the rise of interest rates.
April’s job figures were released just two days after the Fed announced its 10th interest rate hike in just over a year, raising rates by a quarter-point to 5% to 5.25%, the highest rate in 16 years.
The new jobs report further complicates the economic outlook for Fed officials, who on Wednesday had suggested they may stop interest rate rises in the near future as they see the effects play out in the economy.
“There are some signs that supply and demand in the labor market are coming back into balance,” Fed chair Jerome Powell said at a press conference on Wednesday. He said the “economy is likely to face further headwinds from tighter credit conditions”, meaning the full effects of the interest-rate hikes have yet to be seen.
This marks a significant change in tone as Fed officials, especially Powell, have in the past reiterated that more rate rises would be needed to reach their target inflation rate of 2%. But now, the economy is “seeing the effects of our policy tightening on demand and the most interest-rate-sensitive sectors of the economy, particularly housing and investment”, Powell said.
Source: The Guardian
Job market stays hot, unemployment rate matches 54-year low
Expectations heading into this morning showed projections of about 180,000 new jobs having been added in the United States in April. As it turns out, according to the new report from the Bureau of Labor Statistics, those projections turned out to understate what appears to be an extension of the hot job market.
While the unemployment rate isn’t my favorite metric, it’s worth noting for context that in January 2021, when President Joe Biden was inaugurated, the unemployment rate was 6.3%. Now, it’s 3.4% — a level the United States did not reach at any point throughout the 1970s, 1980s, or 1990s. Before this year, the last time the jobless rate reached a figure this low was May 1969. (We hadn’t yet landed on the moon and Woodstock was still a few months away.)
I’m mindful of the chatter about whether the economy is in a recession, but by any reasonable measure, these are not recession-like conditions.
As for the politics, let’s circle back to previous coverage to put the data in perspective. Over the course of the first three years of Donald Trump’s presidency — when the Republican said the United States’ economy was the greatest in the history of the planet — the economy created roughly 6.35 million jobs, spanning all of 2017, 2018 and 2019.
According to the latest tally, the U.S. economy has created nearly 13.2 million jobs since January 2021 — roughly double the combined total of Trump’s first three years.
In recent months, Republicans have responded to developments like these by pretending not to notice them. I have a hunch GOP officials will keep the trend going today.
3 indicators the job market is seeing what one economist calls an ‘unambiguous cooldown’
The job market is still hot but is clearly slowing from the scorching levels seen during much of the past two years, according to labor experts.
Job openings and voluntary worker departures or, quits, declined in March, while the layoff rate increased, according to data issued Tuesday by the U.S. Bureau of Labor Statistics.
The Federal Reserve began raising borrowing costs aggressively last year to cool the economy and labor market, aiming to tame stubbornly high inflation. And a pullback in lending, exacerbated by recent turmoil in the banking sector, may apply an additional brake on the U.S. economy.
1. Job openings
Job openings, a proxy of employers’ demand for workers, dropped to a two-year low in March.
Openings decreased to 9.6 million in March, a drop of 384,000 from February, according to JOLTS data.
Job openings kept breaking records as the U.S. economy reopened in the Covid-19 pandemic era. Businesses clamored to hire workers, and openings eventually peaked above 12 million in March 2022.
There are also 1.6 job openings for every unemployed worker, the lowest ratio since October 2021.
However, openings remain well above their pre-pandemic baseline. For example, there were about 7.2 million job openings a month, on average, in 2019.
The so-called Great Resignation trend continued to wane in March.
About 3.9 million workers quit their jobs in March, a modest decline of 129,000 from February. However, these voluntary departures have fallen about 650,000 from about a year ago, when quits were near record highs.
Quits are a proxy for worker confidence that they can find another job, since those who leave often do so for new employment.
The slowdown was most pronounced in accommodation and food services, which includes businesses such as restaurants and hotels. The quits rate declined 1.3 percentage points over the month, more than double the rate of other industries, according to JOLTS data.
There was a sharp uptick in layoffs in March.
The layoff rate increased to 1.2%, the highest level since December 2020, from 1%.
The number of layoffs rose 248,000 over the month, to about 1.8 million, which is “near the pre-pandemic level after spending much of the last [two] years well below, amidst a historically hot job market.”
The workforce is aging. 3 labour experts share how companies can prepare
While more people than ever will likely need to work longer to support themselves, for the first time, workplaces will need to ensure they court and retain these older workers. This group had traditionally been ignored in many sectors but as populations decline, they could be critical to fill key roles. (Currently countries like Singapore have already reached full employment and workers 55 and older there enjoy one of the country’s highest employment rates.)
A number of strategies will be needed to meet the needs of this transformed workforce, both for society, workers and business. Experts discussed just this topic at a special World Economic Forum Growth Summit panel discussion this week: Skills for Growth: Creating a Future-Ready Workforce.
Here’s what panellists say leaders must do to prepare:
Invest in development. With people living and working longer, a new mindset will be needed to develop skillsets over a longer period of time and through different phases of a person’s life to ensure workers can contribute for longer.
As Nicolas Schmit, Commissioner for Jobs and Social Rights at the European Commission says, we’re “investing in people during the whole working life.”
“This practice to say, “Well this person is 50, why should we still invest in this person, this person will retire.” This approach is wrong.”
Redesign roles for new needs. Preparing for a reality where labor markets are tight and workforces are aging means companies will need to carefully consider how they retain their experienced workforce. This might require rethinking the type of tasks these workers do and how those tasks are allocated, says Soon-joo Gog, the Chief Skills Officer at SkillsFuture Singapore, noting that some might be financially stable and not require a full-time role.
“The question of the mature worker is an important one,” explains Gog. “I think the current and future has to be considered carefully.”
Healthier workplaces. As companies require workers to work for longer, worker health and wellness becomes more critical than ever, says Nicolas Schmit, Commissioner for Jobs and Social Rights at the European Commission. Working conditions, he adds, will become “more and more important” especially as we enter a period where work itself “becomes rarer.”
Says Schmit: “We are in the shortage so we have to invest more in the good shape of work.”
Some organizations are already factoring wellness into their planning. Gog noted that when her organization does workforce planning with companies, it focusses on which industry has the highest percentage of older workers, and to what extent it can support a company to redesign jobs not just for retention, but also for social engagement, which can improve longevity.
New models that work across age groups. Creating a smooth transition into retirement could create options that work for a variety of workers at different life stages, points out Deanna Jones, EVP People, Communications & Transformation at Baker Hughes, USA.
“The flexibility that you provide to transition into retirement helps provide a framework by which we can do a better job flexibly at all ages. There is something there around how we work and how we create flexibility in how that allows us to balance the mature workforce, as well as the needs of families and parents through their work as well.”
Schmit agrees and point out the need to invest in “the transition from work to pension, I think it should be organised differently, much smoother and in a smooth way.”
“This is also a new view we have to keep on working age.”
Source: World Economic Forum
Italy unveils measures to boost flexibility in labour market
Italy is scaling back a poverty relief scheme and making it easier to hire workers on a short-term basis, as the rightwing government addresses complaints from employers about the difficulty and costs of recruitment. In a special May Day cabinet meeting, Prime Minister Giorgia Meloni’s government approved the decree aimed at reducing the number of people dependent on state benefits and giving more flexibility to the labour market. The government will also spend €4bn on a six-month cut in payroll taxes for low-income earners, and is cutting taxes on fringe benefits for workers with children, reflecting policymakers’ growing preoccupation with Italy’s low birth rate. “We are investing in workers and families. It is a real help against the high cost of living,” said Giancarlo Giorgetti, finance minister, after the decree.
Employers have long griped that the citizens income scheme — a monthly stipend to all unemployed Italians — makes it tough for them to find willing workers. It is also a cause of resentment among salaried workers.
“It was a big disincentive for people who are able to work to search for a job, especially in the south, where wages are not so high,” said labour market economist Pietro Reichlin.
From next year, though, Italy will have two separate welfare programmes. The first, more generous scheme, expected to cost about €5.6bn, will be for those deemed unable to work as a result of disability or family responsibilities. In a separate scheme, lower benefits will be given to individuals deemed employable, who will be required to attend skills training programmes to receive state support.
The government has also earmarked €4bn to reduce the “tax wedge”, the difference between the cost to a business of hiring a worker and employees’ take-home pay. The measure will benefit individuals earning less than €35,000 a year, and will be in force from July to December. Rome is also eliminating taxes on up to €3,000 of annual fringe benefits for workers with children. “The typical Italian firm feels a lot pain from the cost of labour,” said Reichlin. “Meloni is trying to lower the payroll taxes . . . But the government has limited space.”
Source: Financial Times
14 million jobs worldwide will vanish in the next 5 years, new economic report finds
Huge disruptions will rock the global job market over the next five years as the economy weakens and companies boost adoption of technologies such as artificial intelligence.
That finding comes from the World Economic Forum, which on Sunday published a report based on surveys of more than 800 companies.
WEF — which hosts a gathering of global leaders in Davos, Switzerland, every year — found that employers expect to create 69 million new jobs by 2027 and eliminate 83 million positions. That will result in a net loss of 14 million jobs, equivalent to 2% of current employment.
Many factors will feed labor market churn during that period. The shift to renewable energy systems will be a powerful engine for generating jobs, while slower economic growth and high inflation will drive losses.
The rush to deploy artificial intelligence, meanwhile, will serve as both a positive and a negative force.
Companies will need new workers to help them implement and manage AI tools. Employment of data analysts and scientists, machine learning specialists and cybersecurity experts is forecast to grow 30% on average by 2027, according to WEF.
Source: CNN Business
US Job Openings Fall, Layoffs Jump in Sign of Softer Labor Market
Vacancies at US employers fell in March by more than forecast and layoffs jumped, indicating softening demand for workers.
The number of available positions decreased for a third-straight month to 9.59 million from nearly 10 million a month earlier, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday. That was the lowest in nearly two years and fell short of the median estimate in a Bloomberg survey of economists.
The data point to a gradual moderation in labor demand, which should eventually bring the job market into better balance and alleviate upward pressure on wages. While some companies — notably in technology and finance — have cut employees, the labor market as a whole remains resilient and has been a stalwart between the US and recession.
The so-called quits rate, which measures voluntary job leavers as a share of total employment, edged down to 2.5%, matching the lowest in two years. That equates to about 3.9 million Americans and reflected a drop among workers in accommodation and food services.
The ratio of openings to unemployed people ticked down to 1.6 in March, the lowest since October 2021. In the firm labor market that preceded the pandemic, that ratio was about 1.2.
Many economists expect a combination of headwinds like tightening credit conditions and persistent inflation to tip the US economy into recession this year. A key element of that, though, is a significant weakening in the labor market.
Given companies tend to freeze hiring before initiating layoffs, the JOLTS report will be a key indicator of labor market strength in coming months. Hires were little changed in March, according to Tuesday’s report.
The data precede Friday’s monthly jobs report, which is currently forecast to show employers added 180,000 jobs in April. Economists are expecting the unemployment rate to tick up slightly and for average hourly earnings to rise at a similar pace as the prior month.
Some economists have questioned the reliability of the JOLTS statistics given the survey’s low response rate. By year-end, it had fallen to about 31%, roughly half the rate just three years earlier.