Another month, another unchanged unemployment rate. November 2022 labor market data showed a steady 3.7% rate of unemployment in the country, matching figures from the previous month and perpetuating the already tight market. Despite this news, some industries are seeing significant fluctuations in employment levels.
In industries where employee demand is increasing, wages are also going up (by 5.1% year-on-year), suggesting that inflationary pressure could persist. If the last year has been any indication, we know what the Federal Reserve (the Fed) will do with high inflationary pressure: raise interest rates.
The 3.7% unemployment rate reflects consistency in the U.S. Labour Department findings over the last number of months, which have hovered between 3.5 and 3.7% since March. Although still hot, the market is cooling slightly compared to last year.
What Experts Are Saying
Nick Bunker, the economic-research director at Indeed Hiring Lab, believes that the U.S. labor market is “slowing down a little bit,” but has “far more momentum than the Federal Reserve would like.”
He mentions that the current labor market will be good in the short-term, but “…For the latter half of next year, it might not be good news depending on how the Federal Reserve interprets this.”
According to Jan Groen, chief U.S. macro strategist at TD Securities in New York, “the Fed needs to slow down the labor market by a lot, and the only means by which it can achieve this is to hike more than what it and anyone else initially expected to be sufficient. We now project to see a 50bp hike in December, another 50bp move in February, followed by two 25bp hikes at the March and May meetings.”
“I still believe the economy tips into a short and shallow recession mid-2023, based on eroding labor market growth, but the probability of no recession is now higher,” adds Steven Blitz, chief U.S. economist at TS Lombard in New York.
On November 30, Federal Reserve Chair Jerome Powell continued the conversation. “It is likely that restoring price stability will require holding policy at a restrictive level for some time,” He goes on to note that, “History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”
Industries Experiencing Growth
Overall, employment growth has been lower in 2022, averaging 392,000 per month compared with 562,000 in 2021.
And in the month of November 2022, that number dropped below the annual average to 263,000. The 10.3 million job openings at the end of October equated to 1.7 for every unemployed person.
Frontrunning sectors leisure and hospitality created 88,000 jobs last month. It is important to note that employment in this industry is still down due to the pandemic, and this number reflects an outstanding deficit of a whopping 980,000 jobs compared to pre-COVID figures.
Most new job openings in the sector were at restaurants and bars, and growth is predicted for this sector moving into the new year.
Following hospitality in growth are healthcare and social assistance, with 68,100 jobs added. Government payrolls (42,000) and construction employment (20,000) are also worthy of an honorable mention.
A considerable portion of these jobs is getting filled. Healthcare, hospitality and government sectors all hired quickly.
Job hunters curious about the size of organizations hiring should think small. Brian Bethune, an economics professor at Boston College said “The S&P 500 companies are not going to be driving job growth, it’s mainly going to be the small business sector.”
Industries Experiencing Losses
November saw roughly 186,000 people exiting the labor force, which leveled the unemployment rate out to the same 3.7% seen last month.
Retail took the most significant dip in November, with 29,900 jobs lost. Subsectors of general merchandise were hardest hit. Fifteen thousand one hundred jobs were lost in the transportation and warehousing industries.
Declines in retail may result from inventory management issues following the shift back to in-person purchases after two years of online shopping during the pandemic.
Temporary help jobs also dropped down with a 17,200 decrease. According to economists, right-sizing of tech giants like Amazon, Meta and Twitter has job hunters worried but small firms are still in desperate need of employees.
“Overall, the job market is still hot. Despite headlines of layoffs and hiring freezes, employers are still adding workers,” according to Daniel Zhao, the lead economist at Glassdoor, “Ultimately, that’s a positive sign for people who are still trying to find the job that is the right fit for them.”
Folks should stay poised for the upcoming consumer price index report, scheduled for release in December. Data points outlined in the report will be a strong indicator of what Americans can expect in the year ahead.
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This post was produced and syndicated by Career Step Up.
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