A Striking Jobs Report
Welcome back to the Recruitonomics Newsletter! This week, we’re diving into the latest U.S. jobs report. Employment and wage gains were mostly as expected, except for a striking surprise in the manufacturing sector.
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This Week on Recruitonomics:?
UAW Taps the Brake on Speedy Job Growth
In October, the U.S. economy added 150,000 jobs. The unemployment rate rose slightly to 3.9%. Paired with revisions to last month’s numbers, this report shows the labor market is cooling ever so slightly, right on cue. However, it isn’t exactly the organic cooling the Fed was looking for. The most striking part of this report was the decline in manufacturing: Labor action in the motor vehicle and parts manufacturing subsector dropped by 33,000 last month. The United Auto Workers and American auto manufacturers recently came to a deal but not before the strikes disrupted strong employment growth. Elsewhere in the report, wage growth continued to moderate – a positive sign for the Federal Reserve.
Read the full article here .
What does this mean for recruiters??
It was another positive jobs report for recruiters! Cooler labor growth may sound bad but in reality, it just means there’s a sustainable pace of growth that recruiters can feel more comfortable with.?
Canadian Recruiters Bundle Up as the Labor Market Turns Frosty
For the third time in a row, the Bank of Canada (BoC) has held their policy interest rate steady against the backdrop of a cooling labor market. Last month, just 18,000 new jobs were created while the employment rate (proportion of employed working-age population) fell a percentage point to 61.9%. An even more worrisome sign is that the unemployment rate also rose by 0.2 percentage points, climbing 0.7 percentage points from its low point in April. The BoC watches wage growth closely, as it directly impacts their fight against inflation. Recently, there’s been some positive signs: Indeed’s wage growth tracker shows a gradual decline in Canada. While this sounds like bad news for workers, it’s good news for inflationary pressure.
Read the full article here .
What does this mean for recruiters??
With the BoC’s high rates, recruiters should closely monitor the labor market for signs of a recession, though rate cuts are becoming more likely in 2024. For recruiters looking to hire in-person roles like cashiers and stockers, their opportunities may be more bountiful compared to industries like construction.?
Keynes’ Imagined Utopia Isn’t Quite Here… Yet?
John Maynard Keynes was one of the most famous economists of the last century. In the 1930s, he made two famous predictions; First, he predicted living standards would increase by 4- to 8-fold over the subsequent century; Second, he believed workers would only labor fifteen hours per week. His long-run projection of living standards are actually impressively on point: Between 1930 and 2018, GDP per capita in the U.K. increased from $6,800 to $38,000! That’s a change of 440% – with still a decade to go! The fifteen-hour work week… less so. The idea has been ridiculed (rightly so) but workers are truly working far less than they were a few decades – not to mention, a century – ago. Of course, there is a large inverse relationship between average income levels and average working hours: People in poorer countries work far more than those in very rich countries. As incomes rise, people can simply afford to work less. In advanced economies, average annual working hours have declined from nearly 3,000 hours per year in 1870 to just 1,400 to 1,800 hours per year today. When Keynes made his utopian prediction, that was closer to 2,500 hours per year. Workers are truly working less, just maybe not as few hours as Keynes optimistically predicted.?
Read the full article here .
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What does this mean for recruiters?
Though we aren’t working fifteen hour weeks, a better harmony between work life and personal life has become more important for many workers and rightly so. In a tight labor market, companies and recruiters should emphasize perks like flexibility regarding working hours and a decent work-life balance.??
Recruiting Tips:?
Employer branding can set you apart in the fight for talent, and even though the labor market is cooling, the next generation of talent is still bringing completely different attitudes to the workplace. They have true expectations for how organizations should behave ethically, treat their employees, and more. Recruiting that younger generation of talent, then, will require you to have a clear and confident employer brand that is communicated with clarity.?
Recently on Recruitonomics:
The U.S. economy is booming – or boomy, if you prefer. In the third quarter, inflation-adjusted growth came in at an unbelievable 4.9%! Barring the post-COVID recovery, that’s the highest quarterly growth rate since 2014. Plus, it absolutely destroyed the consensus forecast – the economy is far outperforming expectations. An average onlooker might be scratching their head at the strength of the economy right now: Wasn’t a recession a sure thing? And they’re right to be confused: some forecasters made overly confident predictions in 2022 of a downturn this year. But the economy has held up, buoyed by the strength of consumer spending and a robust labor market. Recruiters shouldn’t anticipate a recession in the coming months.
Read the full article here .
The Federal Reserve’s latest Survey of Consumer Finances also proved recession truthers wrong recently, which shows households are actually more prosperous than ever. The survey is released every three years and shows data on family income and wealth in three-year intervals. American wealth surged substantially between 2019 and 2022– and that’s adjusted for inflation! Moreover, most of the Fed data below will consider the median instead of averages. High-income and high-wealth individuals skew the average to the upside whereas this is not a problem with the median. Median family income in constant prices (inflation-adjusted) stagnated for almost a decade after the financial crisis. This has changed after the COVID-19 pandemic. Both median and, even more so, average family incomes saw a significant surge between 2019 and 2022. With this consumer strength, it is hard to see why the economy would slow substantially, absent a major economic shock.
Read the full article here .
What Recruitonomics is Reading:
This week, in the continued fight against inflation, the Federal Reserve Open Market Committee decided to hold interest rates at their current target, rather than increasing or decreasing. Rates remained in their range of 5.25-5.5, the highest they have been in decades. Though inflation has slowed in recent months, the fight against inflation has yet to be won, but pausing at specific intervals can give the Fed more time to observe the data coming in (like today’s job report) and make decisions that will bring inflation down to a more manageable level.?
?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.