Introducing our new monthly video series on the jobs reports featuring our Chief Economist Sania Khan and Senior Director, Product Marketing, Jason Cerrato. Every Friday morning after the reports are released, grab a cup of coffee and join them for the latest on the jobs numbers.
This month’s JOLTS (covering February) and jobs report (March) were all about moderation, as few gains or losses were seen. But while most overall moves were subtle, the reports show that the Federal Reserve’s moves to slow inflation are starting to work.
“Much to what the Fed would like to see, we’re finally seeing a slowdown in hiring and a slowdown in job openings by employers,” said Sania Khan, Eightfold AI Chief Economist. “And I think that’s really due to the financial-sector uncertainty and overall economic uncertainty: Are we going to see a recession or not? And that uncertainty is causing employers to pull back on hiring.”
For the first time since May 2021, job openings fell below 10 million, decreasing to 9.9 million or 6 percent, according to JOLTS. Overall, there was little change in February, with total hires at 6.2 million and separations at 5.8 million.
The industries that saw the biggest decreases in job openings were professional and business services; healthcare and social assistance; and transportation, warehousing, and utilities. In terms of gains, construction and arts, entertainment, and recreation added the most job openings.
In the jobs report, the U.S. labor market showed signs of moderate growth in March, with non-farm payrolls rising 236,000, slightly below economists’ expectations. Unemployment stayed relatively unchanged at 3.5 percent.
Some prime-age workers were drawn back into the workforce due to nominal wage growth, numbers increasing from 80.5 percent in February to 80.7 percent in March. But nominal wage growth actually declined in March, with average hourly earnings growth at 4.2 percent over the past year, down from 4.6 percent in February.
Additionally, the jobs report showed a noteworthy moment for Black workers with unemployment hitting 5 percent, the lowest since records began in 1972. The Black labor force rose to 64.1 percent, the highest it’s been since 2008, “a significant milestone for the Black community and the U.S. economy as a whole,” Khan said.
Overall, with wage growth cooling and job growth slowing, the Fed is likely to continue its interest-rate hikes, as it seeks to further moderate job growth.
RELATED: Watch the video on the jobs report.
Here are our experts key takeaways from the reports:
- Although there is still a need for workers, firms are pulling back on openings and hiring due to fears of financial-sector uncertainty and overall economic uncertainty. This is likely to continue until we see an economic downturn.
- Overall, it is expected that layoffs will be less severe compared to previous economic downturns, as companies have recently faced challenges in finding skilled candidates to fill job openings.
- Leisure and hospitality once again led the way in job gains with 72,000 new jobs added, followed by temporary help services with 65,000 jobs. The latter indicates that the demand for contingent workers is expected to rise. According to Eightfold AI analysis, the number of contingent workers in the United States is predicted to increase by 26 percent this year alone.
- The recent ‘ghost jobs’ phenomenon has brought the idea of skewed job openings data to light. However, from Khan’s firsthand knowledge as a former Labor Department employee, JOLTS data is collected directly via organizations and relies less on data collection from online job postings, so JOLTS job openings data should still be accurate.
- Black unemployment hit a record low, falling to 5 percent and the Black labor force participation rate rising to 64.1 percent, a significant milestone. Eightfold data shows that increasing the share of Black or Hispanic employees by 10 percent can increase an organization’s employee retention rate by 4.4 percent.
- Is generative AI, like ChatGPT, and automation making a dent in jobs? “Not yet,” Khan said. “It’s really too soon to tell what or how exactly our jobs are going to be affected by ChatGPT on a real-life basis.”
Join us for our next JOLTS and jobs fireside chat on May 5.