But the US job market remains hot (even if it is cooling slightly).
Here is the latest data from the Bureau of Labor Statistics.
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The US labor market is cooling off, but only slightly, according to the latest data from the Bureau of Labor Statistics (BLS).
The latest BLS employment situation summary found that the number of payrolled employees increased by 263,000 in September. According to Business Insider, this is higher than the analysis predications of 250,000, but much lower than the 420,000 average for 2022 as a whole.
The job gains in September were particularly in leisure and hospitality (+83,000) and healthcare (+60,000). This returns healthcare workforce participation to pre-pandemic February 2020 levels.
The US labor participation rate hit 62.3% and the unemployment rate stayed flat at July’s 3.5% level.
The unemployment rate fell to 3.5% in September, back to where it was in July, mostly for the "wrong" reasons as labor force participation declined. Two-thirds of the decline in the unemployment rate was due to the drop in the labor force and one-third from increased employment. pic.twitter.com/snor6FSdKK
Average hourly earnings in the US creeped up slightly – but only by 10 cents or 0.3% to $32.46. In 2022, wages in the US have grown by 5%, however, this is much lower than inflation, which currently sits at 8.3%.
Gould added:
A clear sign of cooling in today's jobs report is the deceleration in wage growth over the last few months. The Federal Reserve should be watching these trends closely to make sure they don't overshoot and force an unnecessary and painful recession. pic.twitter.com/RoDpQrYAxl
The BLS’ employment situation summary comes in the same week as its job openings and labor turnover summary (JOLTS).
The JOLTS report found that job openings are starting to decline in the US, they fell by 1.1 million in August 2022 to a total of 10.1 million. This is the largest one month drop since the beginning of the pandemic.
This reduction in job openings suggests that hiring freezes are commonplace across the US. However, while there may be lots of headlines about layoffs, JOLTS found that they were flat at 1.5 million across all sectors.
The tech sector, which has been leading the way with hiring freezes and layoffs, only saw a slight increase from 1.1% (or 34,000) in July 2022 to 1.2% (37,000) in August this year. This is however the highest layoff rate in 2022 so far.
The final piece of data from JOLTS was about quits – the quit rate remained over four million in August (4.2 million, slightly down from the peak 4.5 million in March 2022). The sectors with high resignation rates are leisure and hospitality, as well as accommodation and food services,
These figures suggest that despite a looming recession, the ‘Great Resignation’ is going nowhere in the US. Retention strategies must be a priority for employers, particularly if they implement hiring freezes.
Ultimately, the job market remains strong, but the churn is slowing and further uncertainty is on the horizon.
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