NW Recruiting Partners: July Jobs Market Update
We are over the halfway point of 2023. Let’s look back at the first six months of the year, evaluate what we’ve seen, and take a peek into what might be ahead. While the weather heats up, the job market is cooling down – but it seems to be hitting a gentler stride than many might have expected.
Plenty of Opportunities, But More Stability
In May, job openings dipped about half a million, with 9.8 million job openings compared to 10.3 million in April. This means plenty of open jobs for workers looking, and it also indicates a slight cooldown. The number of layoffs have held relatively steady after decreasing to a lower level in recent months, indicating a little more stability and companies are less willing to let go of current talent.
One place where growth is still happening in a big way is the private sector. In June, the private sector added approximately 497,000 jobs – more than double the predicted 220,000 new jobs. Intriguingly, smaller companies accounted for the most growth in the report: companies with 50 or fewer employees added 299,000 jobs, while firms with over 500 employees actually lost 8,000 jobs.
These figures seem to indicate a slow but steady ending of the “Great Resignation,” the pandemic-era trend of workers quitting or switching jobs in response to an employee-friendly labor market. Voluntary quit rates and wage growth rates are both slowing, while employers’ difficulties in hiring seem to be relaxing somewhat. For employees, this means a little more competition for job openings again and less leverage with prospective employers; for companies, this means your hiring in 2023 is likely a little easier than it was in 2022. And for everyone, this is happening against the backdrop of an economy hoping to avoid a long-feared but still-not-here recession.
Stability is becoming the name of the game – but workers aren’t quite ready to give up their hard-won gains in terms of pay (and pay transparency), flexibility, and a positive workplace culture.
Other Trends to Note
It’s not just raw job numbers turning our heads this month. While some aspects of the Great Resignation and the accompanying workplace shifts are receding, others have stuck around. One major shift: the push for remote and hybrid work. Across job sectors and levels, people spend significantly more time working from home, on average, than before the pandemic – as much as 2 hours per day or more. In many metro areas, fewer workers are “returning to office” full-time, preferring to stick with hybrid or fully-remote positions. According to one study, cellphone traffic in downtown San Francisco is the lowest in the country at 31% of pre-pandemic levels. Some other cities of note: Seattle – 40%, Chicago – 50%; Boston – 54%, and New York – 74% of pre-pandemic levels.
Meanwhile, despite fears of a recession from economists, it seems like the “due date” keeps getting pushed back. While people may be looking for long-term stability in their job searches, they’re jet-setting like never before. The TSA screened a record number of passengers on July 1, 2023 – nearly 2.9 million – beating their previous record from Thanksgiving 2019. Inflation is slowing, job markets are cooling, and people are still spending on non-necessities. Is it possible that the long-term recession talk has led to the conditions that help us avoid one or make it relatively mild?
These open questions will persist over the coming months. For now, however, a desire for stability and cautious optimism drives the market. It’s a good time for employers and employees alike to consider their future planning, whether it’s what they want out of careers in the long term or mapping out the best way forward during this time of wait-and-see. A gentle cooldown may be just what we need to lead us into calmer waters in 2024.