The Job Market Is Getting Weird

The labor market is a confusing mess.?

There are signs things are taking a turn for the worse: Companies like Microsoft , Amazon and Goldman Sachs recently announced job cuts, and Bank of America is freezing hiring as it prepares for a possible recession. More than two dozen US-based tech firms have said they’ll cut their workforce by 10% or more.

Plus, wage gains are cooling , and the International Labor Organization is predicting a disappointing year for the world’s workers.?

The US job market is missing 2.6 million people and even the country’s best economists are struggling to figure out why.?

Still, more than 200,000 jobs were added last month , capping a near-record year for job growth, and the unemployment rate decreased to 3.5%, matching a 50-year low. Industries like information services, recreation and travel are all hiring , and Citigroup is even boosting pay for its junior bankers.?

Welcome to 2023. With the Federal Reserve still hiking interest rates to curb inflation , everyone is wondering whether the economy can avoid a recession and widespread job cuts. Price pressures are certainly easing , and slower wage growth is an encouraging sign for policymakers, who are expected to downshift to smaller rate hikes .?

Yet the damage may have already been done. Earnings reports from the biggest US banks suggest a shakier economy lies ahead, and retail sales just slid by the most in a year.?

So what can you do in this weird environment? Some workers are “career cushioning ” — lining up a plan B while still fully employed, especially as the threat of layoffs looms.?

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?— Claire Ballentine

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