Grab a coffee and join us for 15 minutes of real-time insights on the April JOLTS report, the May jobs report, and more with our Chief Economist, Sania Khan, and our Senior Director of Product Marketing, Jason Cerrato.
Hello, and thank you for tuning in to our June jobs talk with Eightfold AI, or chief economist, Sania Khan and our Senior Director of Product Marketing, Jason Cerrato will share real time insights on the jolts report, the jobs report and other hot topics and talent today. So grab your coffee, kick back and spend the next 20 or so minutes listening to what’s currently top of mind for business leaders. With that, I’ll hand it over to Jason for some JOLTS, jobs and some Java.
00:28 Jason Cerrato
Thank you so much, Kali. I mean, here we are. Again, it’s a Friday. It’s a jobs report. And I’m talking to Sonya, I got my coffee in hand. But it feels like we were just here. I mean, didn’t weren’t we just talking about this yesterday? Did the month go by that fast, Sonia?
00:42 Sania Khan
It flew by. It really did. And it’s an interesting month. With this jobs report, this time, I actually don’t even have my coffee, because I’m so there was so much going on with this one?
00:54 Jason Cerrato
Well, I think one of the things that these meetings and these conversations are doing is they’re having an effect on me. I think I’m starting to understand some of this, and I’m becoming more of a labor economist, by proxy. So I look forward to waking up and seeing the reports and, and reading these things. And the more I talk to you, the more I’m starting to understand them. But I think through my attempt to understand them, I’m also getting confused, because it’s almost like with every sentence that you read something positive, it’s followed by something that comes across as negative. So how do we make sense of this job report today?
01:35 Sania Khan
So nothing makes me happier than to learn that you are understanding this. And it’s interesting to you. But it’s not just you. It’s a tricky one this month. So just to back up a little the unemployment rate is made up of two surveys. So on the one hand, you have the establishment survey, which surveys businesses, and then on the other hand, you have the household survey, which surveys households, people, and if they’re unemployed, employed, what are their wages, like, etc. So this one, actually, you saw, on the one hand, the establishment survey, we created 339 jobs this month. But then on the household portion, we actually saw that the unemployment rate unexpectedly jumped higher than what we were expecting. So it was 3.5% last month, and now it has jumped to 3.7%. So yeah, on the one hand, good news, but then we should always take that and dive into the numbers a little bit deeper and look at the details to find out that it’s not as great as we initially might have thought.
02:47 Jaso Cerrato
if I’m following along correctly, is this the 14th straight month that job creation came in above expectations?
02:55 Sania Khan
Yeah, it’s a 14th street month, and then it’s the 29th straight month of job expansion. So yeah, it’s a strong economy, despite the Feds efforts to tame inflation, and increase interest rates. But again, the Fed will look at the details of this report pretty in depth, and we might actually see a rate pause. So we’ll see. We’ll see what happens with that.
03:28 Jason Cerrato
Now, I know the last time we chatted, we were talking about how this plays out in different sectors and different industries. So I did read that there was an overall increase in job openings, but the job openings in the private sector were actually down, while at the same time, you know, we’re right in the middle of you know, what they were referring to as this seasonal surge. So going back to that kind of industry or sector, look at the data. How did that play out this month?
03:56 Sania Khan
Yeah, so the JOLTS report, which came out on Wednesday, we saw in which that one refers to the month of April, while the jobs report that we’re talking about is talking about May so just to clarify that we’re talking about April still, but the job openings for that jolts report showed that overall opening has rose from 9.7 million to 10 point 1 million over the month. However, when you look specifically at private sector jobs, they’re still down 14% from a year ago. So there’s, if you might have heard all the talk last year where there were two job openings per worker last year now there we’ve dropped down to one roughly 1.6 job openings per worker, as of March actually.
04:52 Jason Cerrato
So one of the things that I read in my HR travels this week, was there was some research that came out from Alexander Mann saying that hiring is harder than ever. And that time to fill was increasing for almost all roles compared to this time last year. So if you lay that over the news this morning, I think that kind of makes sense, right?
05:14 Sania Khan
Yeah, it’s still a tough market to hire. Across the board, I think we’re seeing from small businesses to medium to large businesses, it’s a difficult time for businesses to hire the qualified talent. We’re seeing job openings increase overall, like I just mentioned, and hiring is roughly the same as it was in the previous few months. So yeah, it’s still a hard time to find the right, the right people for the right job.
05:50 Jason Cerrato
So let’s get to that. So let’s get to the question that’s on the top of everyone’s mind. What does this mean for all of the speculation around the second half of this year? And are we heading into a recession?
06:02 Sania Khan
Yeah, there’s still talks of an impending recession. By the end of the year, we’re seeing the job market, the job, the labor market. Cool. So although these are still a robust, strong labor market, as you saw from the one hand of adding 339,000 jobs, we’re still seeing little cracks within the numbers that are showing some signs of cooling, some signs cracking. So economists are still predicting recession by the end of the year.
06:39 Jason Cerrato
Now, the last time we chatted, we talked about some of the news that had come around the time. And we talked about IBM and some other organizations out there that had shared that they were slowing down hiring to kind of evaluate some of their job openings in the rise of generative AI and all of these things. One of the things that I saw was that, while 53% of organizations say they expect increased talent competition over the next six months, there also was a measure that showed 40% 47% of organizations are slowing down their hiring. So which is it? Is it the economy? Is it technology? Is it the labor market reshuffling? Or is it everything at once, like it has been these previous couple of months?
07:29 Sania Khan
Yeah, I think it’s everything all at once. It’s the potential impending recession. So you don’t really want to hire aggressively during this time, you want to kind of slow down and feel what’s gonna happen. But then at the same time, you have these new technologies like generative AI, and you want to hold off and see how much we can do with this technology that we can replace with workers potentially? And then I think evaluating from the other point of that, how can we work together using generative AI and our workers at the same time so that it’s the best of both worlds. We’re taking advantage of this new technology, and we’re taking advantage of the skills that humans have. So you’re working in tandem. And so I think it’s all of that figuring all of that out. I know that JP Morgan actually has 3600 ai related jobs posting, posted on their website. So they want to embrace that generative AI technology. And so it’s yeah, it’s, I think it’s a combination of pausing for the economy to see what happens, but then also taking advantage and not being and being a leader really, in this space, if you if they can.
08:52 Jason Cerrato
So just yesterday, I was talking with an organization and their talent leaders, and we were talking about kind of this triangle of effects this, you know, severe competition for specific skill sets and talent, while at the same time, their business and their industry was pivoting, and potentially finding new ways to deliver to customers or changing their business model to move into another area or revenue stream, while at the same time they’re dealing with this economic uncertainty and headcount, you know, restrictions and limitations and all these things. And, you know, it just hit me that we’re seeing all three of those factors play out in the jobs report this morning.
09:34 Sania Khan
Yeah, I know. It’s all connected. What businesses are facing is really what we’d like to see in the jobs report, as we’re measuring businesses and households. So that’s, that’s great to hear as the labor economist,
09:49 Jason Cerrato
so a couple of things that jumped out to me. One of them was that this is the highest rate of labor force participation since before the pandemic and they showed the measure that it was in this latest month’s report and that the previous time it was that high was January of 2020. I have to take that as a good sign.
10:11 Sania Khan
Yeah, I believe it was last month that we saw that number 80.3% of labor force participation rate, and this month, it stayed steady. So again, we’re seeing more people that are being drawn to higher wages, and coming out of not being employed to to look for jobs, maybe it’s it’s the wages that’s driving them, maybe it’s it’s inflation, that’s, that’s making them come back to the workforce, perhaps now that the pandemic has subsided quite a bit, perhaps it’s, there’s less of a fear of health issues. So they’re coming back to the workforce. I think it’s a combination of all those things, perhaps it’s a getting ready for an impending recession, to ramp up their savings and, and be employed if they can during this time. So another data point is that when we survey, we, as in the University of Michigan, surveyed people and looked specifically at how people are feeling about their own situations in the economy? They were They were pretty positive about it. But then on the flip side, with another survey, I believe it was the Conference Board’s consumer consumer confidence survey, they actually and they were asked where they were asked about, how is the economy doing and how positive are you about the overall economy, they had a less positive outlook. So on the one hand, they’re happy with their finances, and they’re happy with the way things are going for them, despite inflation, and they feel that they can manage it. But then on the flip side, the overall economy, and all of that, they are less positive about that.
12:19 Jason Cerrato
So I’m not going crazy, it’s positive and negative at the same time,
12:22 Sania Khan
it is in all areas.
12:25 Sania Khan
So since the last time we talked, you know, let’s think about what’s been going on at Eightfold. We had our Cultivate conference in San Francisco about a week or two ago, and just this week, we just completed our Cultivate conference in London yesterday, and dealing with two different agendas on two different continents with a variety of participants from all different industries and all different organizations, there were some consistent themes, you know, one was just the pace of change. And the other was the need to kind of look at talent differently, to generate agility and, you know, make the most of the talent, you have to direct it towards where your business is headed, you know, in the very fast approaching future. So when we talk about this, I think if there’s, you know, more people working with more competitive, you know, battles and races for talent, while at the same time, there’s fewer job postings, this also aligns with kind of that need for upskilling. And rescaling and internal mobility into potential new areas, as the world of work is changing the nature of jobs is changing the industries in which organizations operate are pivoting or changing. So all of this starts to come full circle. I think, you know, one of the things that I was looking at, I was looking at some benchmarking data that came out of Gartner. And they were saying that, you know, when we talk about rescaling or upskilling, or internal mobility, just over half, so 51% of employees that were involved in the survey, felt their organization does not provide them guidance for career paths, and potential career paths in the organization. While at the same time, there was also another study that said, you know, there are half of organizations that have career conversations with employees maybe once or twice a year. But there was also 22% of organizations that openly said they do not have career conversations at all. So as we’re talking about kind of this tightening labor market, this labor market reshuffling or labor market restructuring, and all of the environmental factors that are weighing on organizations, I think it’s why the ability to increase, you know, the natural reflex for having career conversations and upskilling individuals and potentially redeploying them into more fruitful areas for the future, or, at the very least, increasing internal mobility is so, so popular I mean, that’s my that’s My HR heart speaking. But I feel that, you know, if I’m understanding all of these reports correctly, that the reports are also leading to this type of conclusion, what do you think?
15:11 Sania Khan
Yeah, it makes sense, right? If you are a business, and you’re having trouble finding the qualified talent, the labor quality that you’re really looking for, while simultaneously if you’re in one of these industries, like tech or banking, which is really where your investors are putting pressure on layoffs and reducing headcount, what do you do? Right, it’s like, it’s a push and pull kind of situation here. And one of the things that I think that businesses can do to stay ahead of the curve is really, okay, what are evaluating what are their most important needs? And what are their business goals? What are their business unit goals, specifically, aligning that with the specific skills that they might need to follow through with those goals? And then figuring out, you know, how can I upskill and rescale, the people that I currently already have, instead of having some layoffs, right, so if you have someone who knows X, Y, and Z skill, and you need someone with maybe an adjacent skill to that X, Y, and Z, you can upskill and reskill them and put them in the right department where you actually need them, and, and allocate your your human resources really that way. And I think that’s a great business strategy, if they could actually have the data to do it and follow through with it. It takes a lot. It’s a lot more than just firing and then rehiring, sometimes as contractors like we’re seeing in the workplace today, too.
16:55 Jason Cerrato
Well, for the last six months, I’ve been traveling around the country, and I’ve been to California, I’ve been Chicago, I’ve been to Atlanta, I’ve been in New York, and we’ve been having these conversations with talent leaders, and they’re all asking the same questions trying to solve the same problems. I think one of the things that came out of the Cultivate conferences was we also had people that came to those events from around the world. And they were asking the exact same questions and trying to solve the exact same problem. So hopefully, you know, this quick coffee chat this morning, gave some of our listeners some things to think about, and at least some encouragement that they’re not the only ones dealing with this. And we’re all trying to build a better future and find a way out. I think, you know, here it is. It’s a sunny Friday in June. And when you look out the window, sometimes you can say it’s partly cloudy. But when it’s partly cloudy, that also means it’s partly sunny, so a little bit more of the positive and negative at the same time, and we just have to make the best of it. Right.
17:48 Sania Khan
17:51 Jason Cerrato
Well, that’s all for today, another fun Coffee Chat. And back to you Kali.
All right. Thank you all for joining us today. And thank you to Sania and Jason for sharing your insights. We hope you’ll tune in again next month on July 7 For our next jobs talk with April AI. See you next time.