When Jeffrey Durante was laid off from a financial technology company in August, he hoped he could land a new job by November.
But come mid-January, Mr. Durante was still searching for a product-manager job or related role. And he isn’t alone.
Unemployed Americans across the U.S. are spending more time out of work as employers slow down hiring from a red-hot pace earlier in the pandemic. In December, 826,000 unemployed workers had been out of a job for about 3½ to 6 months, up from 526,000 in April 2022, according to the Labor Department. Earlier this month, the number of people seeking ongoing unemployment benefits, known as continuing claims, was 26% above half-century lows reached last spring.
Mr. Durante has broadened his search from tech companies to include firms across several industries. The 28-year-old, who resides in the Washington, D.C., area, said he interviewed with five companies that told him they were putting the positions on hold amid budget cuts and hiring freezes. He was encouraged that companies could see his value, but the news hurt.“It just is a gut punch honestly after getting told that you’re good enough for the job but they can’t hire you,” Mr. Durante said. “Especially in this economy and this job market right now, it’s just something that takes the air from underneath your wings.”
Companies started dialing back on hiring last year, in part reflecting heightened uncertainty in the face of Federal Reserve interest-rate increases. The pullback in hiring helps explain why some job seekers are remaining unemployed for longer despite a strong overall labor market with historically high job openings.
“If you’re somebody who has lost a job, your opportunities of finding one quickly have diminished somewhat since the spring,” said Guy Berger, principal economist at professional networking site LinkedIn.
When employers turn cautious about the economic outlook, they are more likely to first pull back on hiring than they are to resort to layoffs because it is less costly to resume hiring, Mr. Berger said. Such a dynamic occurred during previous slowdowns, he said. Companies hired 8% fewer workers from December 2007 to May 2008 as the recession began, while layoffs ticked up at a slower pace of 2%, Labor Department data show.
It is unclear whether the pool of unemployed workers will expand in the coming months. The unemployment rate was at a half-century low of 3.5% in December. Firms in lower-wage sectors such as restaurants, bars and hotels might be reluctant to cut workers they struggled to hire during the pandemic rebound.
But demand for labor is weakening fastest in white-collar industries. Large companies including Microsoft Corp., Goldman Sachs Group Inc. and Google parent Alphabet Inc. have announced cuts. Layoffs in finance, real estate and tech are beginning to rise from historically low levels as companies that bulked up their staffs earlier in the pandemic shed employees.
Workers who lose their jobs have fewer job prospects than they did a year ago. Postings on job-search site Indeed.com in software development were down 38.5% on Jan. 6 from a year earlier, while they were 30.8% lower in media and 25.6% lower in banking and finance. Overall postings were down 9.9%.
Sarah Herhilan, 44, has submitted close to 2,000 applications since her contractor job in human resources ended over the summer. She is casting a wide net, applying for human-resources jobs and others including a customer-service position at a Home Depot store and an assembly role at a small manufacturing plant.
The Port Sanilac, Mich., resident is finding that the competition is much stiffer than in the latter half of 2021, when she was also unemployed and looking for work. For a remote position in human resources, she has recently seen 800 other applicants for the same job on LinkedIn, roughly three to four times as many applicants as she had to compete with in 2021. She is landing far fewer interview opportunities.
Ms. Herhilan exhausted Michigan’s allotted 20 weeks of unemployment benefits. Now, she is running through savings.
“I’m very, very frustrated and extremely stressed and anxious because I don’t know when I’m going to land a job,” she said, noting she has had some wonderful, in-depth conversations with employers.
“I get off the phone feeling really, really good or get out of the interview feeling really, really good. And then I either get ghosted or they tell me that they’ve chosen another candidate,” Ms. Herhilan said.
Ads on Indeed.com for human-resources jobs have dropped sharply over the past year.
“That suggests that overall hiring will be pulling back as well,” said Nick Bunker, economist at Indeed. “You only stop hiring the people who help you hire when you have no plans to further expand.”
Payrolls grew an average of 375,000 a month in 2022, down from an average of 562,000 in 2021, when the economy was rebounding from the pandemic. The coming months will reveal whether the slowdown in hiring is temporary or the start of a deeper downturn.
Economists surveyed by The Wall Street Journal in January said they expect employers to cut jobs starting in the second quarter through the end of the year. For 2023 as a whole, economists expect that payrolls will decline by 7,000 a month on average.
There is a silver lining for unemployed Americans: Job openings remain historically high. That means many workers such as Daniel Wilkerson are still finding jobs, even though it is taking longer than they anticipated.
Mr. Wilkerson of Spanish Fork, Utah, said he would start a new role in sales and recruiting at a staffing agency in late January after months of unemployment. Mr. Wilkerson was laid off from an account-executive role at a software company in September. He expected to quickly find a new job, given an abundance of job openings and his history of finding work fast.
But his unemployment spell started to draw out. Without a steady source of income, the 37-year-old had to put his house in forbearance. He collected weekly unemployment benefits of $650 and food stamps to help financially support himself and his four children.
Since Mr. Wilkerson submitted over 200 job applications and interviewed with about 10 companies, his longest job search ever is now over. In his new position at the recruitment company, he is looking forward to helping connect workers with jobs when they need them.
“Now I get the opportunity to help others, and I can empathize with them,” he said. “I’m so excited.”
Source: Wall Street Journal
