The job market is still hot – for now

A storefront in Montebello, California, on December 9, 2021.

Frederick J. Brown | AFP | Getty Images

Workers continue to benefit from a red-hot job market characterized by near-record demand for labor, which has translated into ample choice and higher pay.

However, there are signs of a slowdown in some industries, and Fed policy could dampen the good times for workers.

“Workers still have considerable influence in the U.S. labor market,” said Nick Bunker, director of economic research at Indeed Hiring Lab.

More from personal finance:
What new grads need to know about money and jobs
These bachelor’s degrees from public universities pay over $100,000
25% of Americans delay retirement because of inflation

“[They’re] Spend their time in the sun, but some clouds may appear and darken the foreground,” he added.

The U.S. Labor Department said Wednesday that 1.2 million layoffs were recorded in April, a record low. This suggests that employers are trying to retain employees amid an increase in vacancies and voluntary resignations or “resignations”.

There were 11.4 million vacancies at the end of April, Down from record 11.9 million vacancies in March But it remains near record highs, according to the Labor Department. (Job openings represent an employer’s need for workers.)

There were 1.9 job openings per unemployed person in April, down slightly from nearly 2 per person in the previous month.

More than 4.4 million people quit their jobs in April, just 25,000 fewer than the record figure in March, as ample opportunity elsewhere.

Employers raise wages to compete. The average worker’s wages rose 6% in April from a year earlier, the biggest annual increase in more than 20 years. according to to the Federal Reserve Bank of Atlanta.

This really doesn’t look like a labor market about to go into recession.

Daniel Zhao

Glassdoor Senior Economist

But there are signs that growth may have leveled off. The 6% rate, while up by historical standards, is unchanged from March 2022.

“The situation appears to have eased, but employer demand remains extremely high,” said Daniel Zhao, senior economist at career site Glassdoor.

“While there are fears of an economic downturn or even a recession, it doesn’t look like the labor market is about to enter a recession,” he added.

Employer demand swells from early 2021 as the U.S. economy opens wider from a pandemic-induced downturn, and as a Covid-19 vaccine becomes available.

Workers are not responding in sync for a number of reasons, such as ongoing health concerns, family care responsibilities, cash reserves in family stimulus funds and a broader rethinking of workers’ careers.

However, Layla O’Kane, senior economist at Emsi Burning Glass, said job openings and departures in industries such as retail, accommodation and food services fell, indicating a weaker economy.

“Some saw [swiftest] The rise in resignations and wage growth is starting to cool,” Bunker said. “Times are still good for workers, but they’re unlikely to get better.

The Federal Reserve is raising interest rates to reduce high inflation, which could reduce employers’ demand for workers. However, the ultimate impact and timing are unclear.

“The labor market is expected to cool,” Zhao said. “That’s what the Fed is trying to do — cool the economy and lower inflation, and we should naturally expect the labor market to cool as well.”