Interest Rate Headaches
Hello and welcome back to the Recruitonomics Newsletter! This week, we’re diving into the United Kingdom’s recent turbulent data releases, which point to a weak labor market and headaches for the central bank.?
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This Week on Recruitonomics:?
Conflicting Macro Data Causes Severe Headaches for the BoE
Data near the beginning of the year suggested that the United Kingdom was on the up and up. GDP figures made it seem like the economy had shaken off its shallow recession and the manufacturing PMI (purchasing managers index – an economic indicator)l finally eclipsed 50 – the threshold that separates economic contraction and expansion. Then, earlier this week, we got two sets of data that would suggest a far worse economic performance – and cause severe headaches for the Bank of England, the central bank of the United Kingdom. First, the labor market data shows that the number of payroll jobs has fallen for two consecutive months and is down by almost one hundred thousand since January. This is a stark shift from the end of 2023, when the labor market was booming while GDP took a nosedive. Additionally, the unemployment rate is low, economic activity is spiking, and unfilled vacancies are on a 24-month long decrease. At the exact same time, the U.K. economy also got a much hotter inflation print. This is bad news for the Bank of England, as the weaker economy showcased by the labor market data is certainly suffering from its tight monetary policy. But it can’t slash rates yet, as inflation is far from target. It leaves the central bank – and markets – in a difficult position.?
What does this mean for recruiters??
With stubbornly high inflation, the Bank of England will likely keep interest rates high, which will put further pressure on the already softening labor market. Recruiters will likely face less competition this year as the economy gets a bit stormy.
Read the full article here.
Recruiting Tips:?
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Recently on Recruitonomics:
领英推荐
While some of the Eurozone is suffering from poor demographic trends and sluggish employment growth, Southern European economies have been performing quite well – especially the French economy! France’s economy grew far faster than Germany throughout 2022 and 2023. Plus, GDP projections show that France will continue to exceed German growth rates in the coming years. Its cultural appeal, including high-quality wine, fine-dining experiences, and beautiful beaches, all contribute to high international tourist revenues. Its export of luxury goods from high-end makeup to beautifully crafted clothes also contribute to the soft power held by the French economy. But France is not just about wine, cheese, and perfumes. More recently, the country has also benefited from the rise in international conflicts. Having always been one of the more hawkish members of NATO, France is proud to have the largest military in continental Europe and to be a large exporter of arms. The French economy is hotter than it has been in some time with a strong labor market that has created difficult conditions for recruiters in the country.?
Read the full article here.
In a shift from the recent trend of a steadying labor market, Canada’s job market experienced a setback in March, shedding 2,220 positions. This decline follows two months of robust employment gains. Despite the setback, the longer-term outlook remains positive, with an average of 21,000 jobs added each month over the past six months. While this is an unfortunate step back, economists caution against placing too much emphasis on a single month’s data, and instead emphasizing the importance of considering longer-term trends to better understand the underlying growth of the job market. The biggest surprise from this past month’s Canadian data is the strong performance of the goods sector, which had not been making very many employment gains in recent months.?
Read the full article here.
What Recruitonomics is Reading:
Is Gen Z really in trouble? Often, we hear this generation is doomed to be worse off than their parents, due to the difficulty of home ownership, the dangers of climate change, or even the inescapable doom scrolling. But there are actually plenty of things to be optimistic about for this young generation. In some ways, our view of Gen Z is too narrow: If you look at emerging economies, Gen Z is positioned to be richer, healthier, and more educated than their parents. Even in wealthier countries where Gen Z feels so glum, there’s more to smile about that we believe. In the U.S., the demand for labor is hot, increasing the wages for the youngest generation of workers. The youth unemployment rate is at its lowest point in decades, and on average, Zoomers are making far more at this age (when you adjust for inflation) than millennials or Gen Xers. It's a cheerier outlook than many will admit, despite the anxiety created by cell phones.
?More Data & Insights:
Thank you for reading! Stay tuned for next week's Recruitonomics Newsletter and check out Recruitonomics.com for more data-driven insights.