The United States job market shows signs of a slowdown, particularly for white-collar professionals. Despite a low unemployment rate (3.7%) and robust hiring, the demand for workers is cooling, according to the most recent Job Opening and Labor Turnover Summary.
Data analysis from the U.S. Bureau of Labor Statistics reveals that the number of open jobs dropped 617,000 to 8.7 million on the last day of October, the lowest level since March 2021.
“A far greater contribution to reducing the excess demand for labor is being made by a reduction in vacancies rather than an increase in unemployment,” said Conrad DeQuadros, senior economic advisor at Brean Capital.
Signs Of A Cooling Labor Market
The JOLTS report shows job openings declined in healthcare and social assistance (-236,000), finance and insurance (-168,000) and real estate and rental and leasing (-49,000).
In October, hiring fell 18,000 to 5.886 million, according to economic data from the St. Louis Federal Reserve. There has been a significant decrease in the pace of hiring in the private sector since reaching the highest point in November 2021.
Although the U.S. economy added 199,000 jobs last month, the job growth was driven by three predominant sectors: healthcare (+77,000), government (+49,000) and leisure and hospitality (+40,000). Jobs created in these three sectors alone account for nearly 83% of employment gains in the U.S.—an astounding 166,000 jobs.
The Conference Board Employment Trends Index
The Conference Board Employment Trends Index is a comprehensive indicator for employment, aggregating eight leading indicators of employment to show underlying trends in employment conditions. When the Index increases, it indicates likely growth in employment, and vice versa. Turning points in the Index suggest an upcoming change in the trend of job gains or losses in the coming months. The higher the reading of the Employment Trends Index, the more robust the labor market is.
The ETI declined to 113.05 in November from a downwardly revised 113.09 in October. This decrease was driven by negative contributions from four of its eight components:
- Percentage of Respondents Who Say They Find “Jobs Hard to Get”: The proportion of survey respondents who indicated that jobs were difficult to obtain reached its highest level since March 2021.
- Percentage of Firms with Positions Not Able to Fill Right Now: Small businesses encountered challenges recruiting new employees.
- Initial Claims for Unemployment Insurance: The number of initial claims for unemployment insurance rose for the second consecutive month in November, although they remain historically low.
- Number of Employees Hired by the Temporary-Help Industry: The number of workers in temporary help services, a significant early indicator for hiring in other industries, continued its downturn in November from its highest point in March 2022.
Selcuk Eren, senior economist at the Conference Board, said, “Looking ahead, we project that job growth will continue slowing and forecast job losses will start in the second quarter of 2024, with the unemployment rate rising to 4.3% by the second half of 2024.”
Source: Forbes
