New Revisions Erase Labor Market Progress
Welcome back to the Recruitonomics Newsletter! This week, we’re discussing the recent revisions to the labor market gains made last year. These revisions erased over 800,000 jobs, a massive change that rewrites how we see the labor market of 2023 and early 2024.?
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This Week on Recruitonomics:?
Data Revisions Subtract More Than 800,000 Jobs: What Now?
The U.S. labor market may have created around 800,000 fewer jobs than originally reported last year, according to new data revisions. This is obviously a very big deal, even in an economy with more than 155 million workers. From April 2023 to March 2024, the labor market was much weaker than it originally appeared, adding an average of only 174,000 net new jobs per month, compared to the originally reported 242,000 net new jobs. This is one of the largest downward revisions in recent history, following the benchmark revision for the recession year of 2009.? However, one of the main issues that plagued the original surveys may also be leading to an overestimation of downward revisions. How has the Bureau of Labor Statistics been so far off? Some economists argue that the BLS’ tools for calculating the employment numbers are less effective in the post-COVID world. But, it’s plausible that the Quarterly Census of Employment and Wages, from which the revisions are based, could be underestimating the true jobs numbers. One of the most notable labor market stories of the past couple of years has been the increase in immigration and its reshaping of the labor supply across the country. But not every immigration case is properly recorded; plenty of undocumented immigrants are working in this country too, but may be fearful of responding to surveys. The QCEW depends on data from state unemployment insurance agencies, but to be counted by those agencies, one must have a social security number. Therefore, while the labor market is certainly less strong than we previously believed, even these revisions may be off. We may not know the true pace of job creation until February, when the final benchmark revision is released.?
Read the full article here.
What does this mean for recruiters??
Regardless of the revisions, the massive gap between labor demand and supply has shrunk substantially since 2022. Recruitment has gotten easier and CPAs (cost-per-application) are down because there are more available candidates for each open position as hiring is slowing down across sectors.??
Recruiting Tips:?
Recruiters face several roadblocks in today’s complex economy: Shrinking budgets, uncertain outlooks, hiring slowdowns. What has remained constant, though, is the need to efficiently attract candidates. In an upcoming webinar, How to Attract the Right Candidates in Today's Labor Market, VP of Strategy Eric Holwell and Data Analyst Josh Previte will discuss the best practices in crafting a job advertisement and refining your recruitment practice. Register today!
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The U.K. labor market remains very tight because of various economic shocks that have negatively affected labor supply. The economy has faced the economic and health shock of COVID-19, Brexit’s immigration-shrinking policies, and an aging workforce. Consequently, the gap between labor demand and supply has narrowed substantially over the last decade. As that gap shrunk and the labor market tightened, employers have found it increasingly difficult to find and hire skilled workers. Data from the U.K.’s Employer Skills Survey shows that the number of companies with at least one hard-to-fill vacancy – those where employers report difficulties filling the role – has increased from 4% in 2011 to 15% in 2022. While this data is lagged (the U.K. government only releases it on a two-year basis), it speaks to the difficulties that recruiters have been feeling for the past several years. There have been a low number of applicants with the required skills and competition from other employers, among other barriers to hiring. The incidence of skill-shortage vacancies has risen from about 16% of all open positions in 2011 to about 36% as of 2022, indicating the severity of the problem that recruiters face finding the right talent.?
Read the full article here.
What Recruitonomics is Reading:
Workers are catching on to the softer labor market and attempting to make moves for more security. A new survey from the New York Federal Reserve showed that the share of workers looking for a new job rose to 28.4% last month, the highest percentage since 2014. This uptick in job seeker activity coincided with a decrease in confidence in their current employers, with the average expected likelihood of becoming unemployed at 4.4%, the highest in the series.?
?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.