Today we will review various data points related to the labor market including the unemployment rate, job losers, job quits, and average hours worked per week. Most of the data can be found in the U.S. Bureau of Labor Statistics (https://www.bls.gov/), Statista (https://www.statista.com/topics/771/employment/#topicOverview) as well other relevant sources of information that review the labor market in the U.S.
I will not be sharing any of the charts, because I can’t find any that are not copyright protected, however you can easily search and find them on the Internet.
Here we go…
The labor market is slowly softening but it has not yet resulted in a significant increase in the unemployment rate. The unemployment rate recently reached 3.9%, which is a new high for this cycle.
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Job losers include people who are unemployed because they lost their previous job. The number of job losers has been steadily increasing, and this might suggest that companies are laying off more workers.
However, the number of job losers on temporary layoff has actually decreased recently. Maybe this means that some companies are planning to bring some of these workers back to the workforce in the near future.
Job quits is another relevant data point and it refers to the number of people who voluntarily leave their positions. Recently the rate of job quits has been declining. This might suggest that workers are feeling less and less confident about their ability to find a new job if they leave the one they currently have. This trend is particularly evident in sectors like retail trade, where job quitting has decreased signoficantly.
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Average hours worked per week has also been trending downward, which is often interpreted as another sign of a softening market. While companies may not be laying off employees extensively yet, they are cutting back on hours these workers are actively doing their job.
Initial claims for unemployment benefits remain relatively low, which indicates that large-scale layoffs aren't happening at this point in time. However, continued claims, which track how long people are receiving unemployment benefits, are slowly but surely rising. This might suggest that those who do lose their jobs are facing difficulty finding a new one, or at least they are not satisfied with the offers that they are finding in the job market.
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Some sectors, like construction, are doing relatively well based on the data. However, manufacturing and retail trade, are showing signs of weakness. The number of temporary workers has also been declining, which is another indication of a softening labor market, but it's not surprising given that the holiday season finished and many of these workers have been laid off.
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In conclusion, some labor market indicators look positive on the surface, however, there are underlying signs of weakness. The data suggests that the labor market is weakening, but it is not clear how severe this downturn will be in the future.
There are fewer job openings, and some sectors are starting to see a decline in employment. Will the Federal Reserve react quickly enough to prevent a recession?