Economic growth is slowing — and other happenings in the world of work

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Catch up on headlines from the last 7 days.

• Economic activity grew at a slower pace than expected in the first quarter of 2023, according to the Commerce Department’s initial estimate. Read more about this below.
• First Republic Bank was taken over by California regulators, marking the second-largest U.S. bank failure in history. JPMorgan struck a deal to take on the bank’s roughly $92 billion in deposits and buy most of its assets on Monday.
• Inflation and wage data came in hotter than expected on Friday, reinforcing beliefs that the Federal Reserve will raise interest rates for a 10th time at this week’s meeting.
• Most millennials are just scraping by. About 73% of those aged 27 to 42 report living paycheck to paycheck, compared to just 60% of the wider population, according to a PYMNTS and LendingClub survey . Experts say older millennials face a particularly tough financial juggling act between supporting children and aging parents.?
• Layoffs continue across sectors. 3M announced it is cutting 6,000 jobs globally while Gap announced it’s cutting 1,800 jobs and DropBox announced it’s slashing its workforce by 16%.
• Job switchers are still nabbing larger raises than those who stay, but those pay bumps are getting smaller. Job stayers saw their pay jump 5.9% in March while job switchers say their wages grow 7.3%, down from 8.4% last summer, according to the Federal Reserve Bank of Atlanta .
• At the same time, workers expect more money than ever to take a new job. According to a recent survey from the Federal Reserve Bank of New York , workers’ salary expectations just hit a new high of $75,811 a year, about $2,100 higher than the last time the survey was conducted in the fall and almost $5,000 above the median household income in the U.S.
• Trade schools are gaining popularity. Construction programs saw a 19.3% jump in enrollment in 2022. Culinary and mechanic and repair trade programs also saw a jump in enrollment. This comes as enrollment at four year colleges continues to fall, according to the National Student Clearinghouse .

Take a closer look at recent trending topics — and engage with meaningful conversations happening on LinkedIn.

Is the economy growing?

• The economy grew at a slower pace than expected at the start of the year as interest rates crept higher. The Commerce Department’s initial estimate showed first-quarter gross domestic product slowing to an annualized rate of 1.1%. Economists expected the growth rate to fall around 2% — it was 2.6% in the final quarter of 2022. Credit conditions have since tightened in light of the banking crisis, as inflation remains high and the Federal Reserve continues to raise rates.?
• “Personal consumption contributed 2.5% to Q1 growth, with strength in both goods and services. It suggests U.S. consumers remained resilient due to a tight labor market,” Janet Mui, head of market analysis at RBC, commented . “This reduces near-term recession concerns.” The next labor market indicators to keep an eye out for are Tuesday’s Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics and Friday’s jobs report, which measures the unemployment rate and how many jobs were added to the economy last month.
• “This will not disturb Fed policymakers who have anticipated ‘subpar’ growth as a consequence of raising interest rates to fight inflation,” Theresa Sheehan, an economic analyst at Econoday, explained . The next Federal Reserve interest rate decision comes Wednesday.

Is anyone taking time off this summer?

• With summer just around the corner, two-thirds of workers are starting to think about taking a vacation. The one problem? Economic uncertainty. About 80% of would-be summer vacationers are considering changing their plans because of still-high inflation, according to a new survey from Bankrate .
• Cost-saving strategies like traveling for fewer days and traveling a shorter distance are top of mind. Even those who aren’t changing their plans are considering how to keep travel cheap. Anna Schermerhorn-Collins, a firefighter, commented that she’s keeping her regular summer trip on the books but will “economize regardless — cooking most meals in rather than dining out.”?
• That could result in workers asking for fewer days off — which tracks with separate research from Pew that found nearly half of workers take less time off than their employer offers for fear of falling behind at work. If you’re in this camp, recruiting professional Summer Chancey recommends “using a day or two of PTO around a national holiday” like Memorial Day or the Fourth of July to give yourself a longer break at work with minimal stress.

How much do you need to retire?

• Ask Americans how much they’d need for a comfortable retirement and they’ll tell you somewhere in the neighborhood of $1.25 million . Meanwhile, the Federal Reserve estimates one person would need $967,000. The reality? The number of those nearing retirement age are nowhere close to either of those figures.?
• Natixis Investment Managers found that the median retirement savings for baby boomers is about $120,000. That means, to reach their goal, the typical baby boomer would need to work for several more years and somehow start putting $186,000 away annually. “Retirement confidence among both workers and retirees is dropping due to a lack of savings and high inflation,” personal finance editor Jim Pavia commented .?
• A separate report from Credit Karma found that 27% of baby boomers haven’t saved a penny for retirement, suggesting many Americans are planning to push off their golden years by essentially working forever. Mary Lou Hughes, a financial consultant, commented that paying off debt, contributing to a retirement plan and living within your means are essential to planning your golden years.

Get ready for the week by seeing what’s coming up.

• Monday, May 1: The Institute for Supply Management will release its monthly survey of purchasing managers measuring activity in the manufacturing sector. It is an indicator of economic health — a non-manufacturing edition lands Wednesday.
• Tuesday, May 2: The Bureau of Labor Statistics will release the Job Openings and Labor Turnover survey for March, which measures job vacancies across industries.
• Wednesday, May 3: The Institute for Supply Management will release its monthly Purchasing Managers’ Index, which tracks if the non-manufacturing sector is expanding. It is an indicator of economic health.
• Wednesday, May 3: The Federal Reserve is expected to raise interest rates.
• Wednesday, May 3: LinkedIn Senior Editor at Large George Anders will release his latest edition of Workforce Insights , digging into which digital skills workers are most interested in honing this year
• Thursday, May 4: The U.S. Department of Labor will release initial jobless claims for the previous week. The report, a proxy for layoffs, tracks the number of people filing for unemployment benefits.
• Friday, May 5: The Bureau of Labor Statistics will release the April jobs report. The monthly release tracks the unemployment rate and how many jobs were added to the economy.