U.S. Labor Market Snapshot | October 2023

Executive Summary

• The U.S. labor market is exhibiting mixed signals as job openings increased from 8.9 million to 9.6 million over July to August, while unemployment and labor force participation remain unchanged.?
• There were 3.2 million more U.S. job openings than workers available, while labor market tightness measures such as job openings to job seekers remain elevated.
• U.S. wages grew at 4.2% YoY, however workers still cite sickness, caregiving, and not wanting to work as the top three reasons for not participating in the labor force.
• Part-time employees, job switchers, and hourly workers all experienced a decline in median wage YoY in comparison to full-time employees, job stayers, and not paid hourly workers.?
• Disability discrimination made up 23.5% of all EEOC case types from October 1, 2023 to October 17, 2023.

U.S. labor market is showing signs of gradual cooling

The U.S. unemployment rate and labor force participation rate remained unchanged at 3.8% and 62.8% respectively from August to September. Labor market tightness, which is measured as the ratio of job openings to job seekers remains elevated, however it has decreased by 1.0% MoM and 10.7% YoY respectively.

U.S. job openings increased from 8.8 million to 9.1 million over July to August, an increase of 7.7% MoM, however a decrease of 0.1%, 5.8%, and 12.3% over the last three months, YoY, and over the last two years respectively.

Establishment size classes with 5,000 or more employees tells a different story, as job openings decreased MoM by 0.3%, however job openings increased for all other periods.

Americans still cite barriers to entering the labor force

The top three factors that have prevented Americans from entering the U.S. labor force according to the U.S. Census Bureau’s Household Pulse Survey outside of retirements include caregiving, concerns for health, and not wanting to work.

These three factors have remained in the top three reasons why Americans are not entering the U.S. labor force for over the past 24 months. American workers are struggling to find child care workers given the shortage of this occupation as pay is low and working conditions are tough.?

The last reason of 'not wanting to be employed' speaks volumes to the paradigm shift we have seen over the past three years in terms of how Americans view work vs leisure and the impact of a pandemic on mental and physical well being.

What does this mean for Employers? People still face a number of challenges which prevent them from entering the labor force. Access to transportation is another barrier to entry. The hawkish policy of the Fed has made it more difficult for Americans to finance the?purchase of a vehicle and?drive to places of employment.?

Employer flexibility will alleviate this problem. According to the most recent WFH Research 56.8% of Americans surveyed worked fully on site, while 30.3% worked hybrid, and the remaining 12.8% are fully remote. Although employers would like employees to return back to the office, employees still face challenges. Employers that can accommodate worker preferences are in a better position to attract top talent and retain workers for the long run.?

There are 3.2 million more U.S. job openings than workers available

What does this mean for Employers? Americans are looking for multiple sources of income as the personal savings rate remains low. The personal savings rate declined by 4.3% MoM, while the percent of those employed with multiple jobs remained unchanged during the same period. American workers are looking for job opportunities that keep with inflation, while balancing the ongoing caregiving responsibilities and flexibility options that many experienced during the initial days of the pandemic.

Separations, quits, & layoffs & discharges all increase MoM?

Total separations – the summation of quits, layoffs/discharges and other separations increased by 0.7% from July to August, indicative of a cooling labor market.?

What does this mean for workers and employers?

Workers: Workers will continue to prioritize monetary factors such as compensation and benefits given the current inflationary environment, while also considering opportunities that allow flexibility in work arrangements (hybrid, remote).

Employers: Employers are looking to close out 2023 with job offers to candidates that align with their expectations, however employers will need to reassess position descriptions to accommodate worker needs such as caregiving, concerns for covid, and other factors.

Voluntary Attrition Quits represent voluntary attrition, whereby workers are consciously choosing to leave their employers. Arts, entertainment, and recreation experienced an increase in voluntary attrition MoM and YoY by 20.0% and 45.9% respectively. Other industries such as information experienced large declines in quits MoM and YoY by 52.6% and 51.8% respectively.?

Overall, the decline in quits MoM indicates that American workers are more conscious about leaving their jobs as rising costs of living seem to remain at the top of mind.?

Involuntary Attrition Layoffs & discharges represent involuntary attrition. Education and health services experienced an increase in involuntary attrition MoM and YoY by 13.8% and 47.8% respectively, while information and trade, transportation, and utilities experienced a decrease in layoffs & discharges MoM and YoY.?

The decrease in layoff and discharges in information and trade, transportation, and utilities is indicative that as the U.S. enters the holiday season, the demand for occupations such as data scientists and delivery drivers will increase in order to facilitate a smooth consumer holiday season.

Wage growth remains modest?

Manufacturing experienced the largest gain in average hourly earnings YoY, while arts, entertainment, and recreation experienced the largest gain in employment levels YoY. The tech layoffs have certainly reduced the number of workers employed in the Information industry given the 2.5% decline in employment YoY.?

According to the Atlanta Federal Reserve Bank’s Wage Tracker, part-time employees, job switchers, and hourly workers all experienced a decline in median wage YoY in comparison to full-time employees, job stayers, and not paid hourly workers. This signals a slightly looser labor market where employees have less options to choose their hours, however it will be more challenging for employers looking to fill vacancies as the U.S. holiday spending season has started.

U.S. EEOC: October Snapshot

The U.S. Equal Employment Opportunity Commission (EEOC) issues press releases on a frequent basis regarding several data points such as type of cases filed, geographic location of cases, monetary damages, and other variables.

For this edition of the newsletter, data was extracted from the EEOC Newsroom from October 1, 2023 to October 17, 2023. During this period, disability discrimination made up 23.5% of all cases, followed by retaliation.??

Examining the data by industry, accommodation, and food services and transportation and warehousing were among the top two industries that experienced the largest amount of claims. Both industries have experienced challenges in terms of filling vacancies and have experienced high attrition rates.