The Return of Hiring: How Jobs Have Grown in the Context of the Post-pandemic Era and the Rise of the Labor Force

“It’s not layoffs, primarily,” Fiore said. “It’s [hiring] freezes. When people are quitting they aren’t being replaced as fast. So that’s a clear change from where we’ve been over the last year-and-a-half, two years.”

More broadly, many companies around the country say they are finding it less arduous to attract and retain employees — partly because many are paring their hiring plans, and partly because the pool of available workers has grown as more people come off the economy’s sidelines. The labor force grew by more than three-quarters of a million people in August, the biggest gain since the early months of the pandemic. As the economy slows, some executives expect hiring to get easier.

“Not that I wish ill on any people out there from a layoff perspective or whatever else, but I think there could be an opportunity for us to ramp some of that hiring over the coming months,” Eric Hart, then the chief financial officer at Expedia, told investors on the company’s earnings call in August.

The Fed’s job openings are slowing down, but they don’t seem to hold the key for recovering the leverage from the H1N1 epidemic

The signals point to an economic environment that may allow employers to regain some of the leverage they lost during the H1N1 epidemic. It’s bad news for people who have been able to take advantage of the hot labor market to demand more flexibility, better pay and other benefits. With inflation still high, weaker wage growth will mean that more workers will find their standard of living slipping.

But for employers — and for policymakers at the Federal Reserve — the calculation looks different. A modest cooling would be welcome after months in which employers struggled to find enough staff to meet strong demand, and in which rapid wage growth contributed to the fastest inflation in decades. A downturn in consumer demand and a rise in unemployment could result in new problems for employers, if there is too much decline in demand.

Some economists, however, have begun questioning the Fed’s focus on job openings. The labor market is strong, but not as strong as openings would imply, according to other signals.

Economists expect the headline figure to show 250,000 jobs were added in last month. It would be the smallest gain in almost two years and below the average gain of over 510,000 over the last 12 months.

So, while things are slowing down, they’re still pretty robust relative to those pre-pandemic normal times. And that’s part of what is keeping inflation elevated.

In the last jobs report, wages were up 5.2% over the last 12 months. That is historically high. but it doesn’t keep up with inflation, which is hovering around 8% year over year (boo!).

Wages have a particular dilemma for the Fed. It wants us to shop just a little less – but not a lot less. Unfortunately, there’s no magic formula for how much wages need to go down to make a dent.

If it comes in well below 250K, you might see some renewed optimism that the Fed’s policies are starting to have their intended effect, and it may not need to keep inflicting pain on the economy.

Nightcap Jobs Report: The Fed, Ford, and Wall Street are Preceding the World’s Biggest Bose-Einstein Breakup

It’s hard to overstate just how delicate the situation is. Kristalina Georgieva, the Managing Director of the International Monetary Fund, said the world is in a time of economic fragility after a lot of shocks over the past two years.

That’s why the Fed’s decisions are being so closely scrutinized. When the Fed raises rates as aggressively as it has in the past several months, it creates painful ripple effects around the globe, pushing the US dollar’s value up and forcing other central banks to raise their own rates as well. All of which could tip the world’s biggest economies into a recession, the UN has warned.

Ford is, once again, raising prices on its first electric pickup, the F-150 Lightning. The company said that the entry-level model will cost $60,000, up from $40,000 when it went into production this spring.

State media reported that President Lukashenko banned consumer price increases across the economy. Any price increase is forbidden today. Prohibited!” The president is quoted as saying something.

Source: https://www.cnn.com/2022/10/06/business/nightcap-jobs-report/index.html

Nightcap jobs report: CEO Barry McCarthy’s major changes aren’t going to stop at Peloton, citing a lawsuit filed by Musk and Twitter

(CNN Business) Lawyers for Elon Musk and Twitter have agreed to postpone Musk’s deposition in the court fight over their $44 billion acquisition agreement, a source familiar with the negotiations told CNN. Musk was supposed to give a deposition today but threw a bombshell earlier in the week where he offered to buy the company for nothing in exchange for dropping the litigation. The two sides are still working out differences.

(Axios) Boston Dynamics, the company behind those viral videos of its creepily agile four-legged robots, is pledging not to weaponize their products and encouraging others in the industry to do the same. According to a letter that was reviewed by Axios, the company is worried that customers don’t believe it when it says that they aren’t building an army that will destroy humanity. Thankfully, they say they are not doing that. Phew!

After letting another 500 people go, Peloton will have 3,800 employees, which is less than half of what it had at its peak. The company said the latest cut marks the last of CEO Barry McCarthy’s \major changes to restore the brand. And if it fails, McCarthy told The Wall Street Journal, Peloton likely isn’t viable as a stand-alone company. It will be going on for another six months.

Source: https://www.cnn.com/2022/10/06/business/nightcap-jobs-report/index.html

The Fed is not releasing any new data from the Amazon Amazon Work Blockade after the First Day of the Great Fire, but the Fed does believe that hiring has stabilized

CNN Business is on CNN. About 50 employees at the only unionized warehouse in the world were suspended by Amazon on Tuesday after they started a work blockade following the fire. Workers said that the building smelled of smoke after a fire broke out there on Monday. A lot of workers walked off the job.

Nela Richardson, chief economist at ADP, said she thinks this is good news for the Fed. “You are still seeing demand for workers through the early stages but it is softer than it was before.”

“It’s really hard to hire somebody this month and three, four months from now let them go. Tim stated that people are being a lot more cautious.

Manufacturing represents a small slice of the overall workforce, however. The ISM survey of service-sector businesses found no change in hiring.

ADP, which handles payroll for more than 25 million workers across the country, reported solid job gains in restaurants, retail and professional services last month.

The U.S. has now replaced all of the jobs that were lost in the early months of the pandemic. There will be continued job gains if there are enough workers available.

Richardson said there will be some loosening in hiring conditions and a continuation of the steady gains if more people come back to the labor market.

Almost a million people joined or rejoined the labor force in August. If that has continued in September, the inflation watchdogs at the Fed will keep a close watch.

Shortages of both workers and critical supplies have made it hard for businesses to keep pace with strong demand for goods and services. The prices have increased. The Fed initially thought those bottlenecks would ease on their own. Despite some encouraging signs like a drop in used car prices, inflation remains high. In August, the prices were up 8.3%.

Cook and her colleagues on the governing board of the Federal Reserve have made it clear that interest rates must remain elevated until there is proof that prices have leveled off.

Cook said inflation must come down, and that the central bank would keep a close watch on it.

Labor force participation is an area of concern for the Fed, said Julia Pollak, chief economist at ZipRecruiter. Getting more people in the workforce will help bring down wage growth, one of several factors the Fed believes could keep inflation high. The September report showed that labor force participation rate ticked down to 62.3% from 62.4% the month before.

The Recovery of the Labor Market from the Swine Flu Epidemic: Some Implications for Jobs, Education, Child Care and Transportation

The reopening of schools may have been a great moment to restart for some people who left the labor force during the swine flu epidemic, Pollak said. “We may not see some of the people who left come back.”

The unemployment rate fell to its lowest level since 1960 in September, due to a decline in the number of people looking for work.

It seems as though it’s a certainty for the upcoming meeting. The magnitude of future rate hikes will become clearer as we get closer to the final two [policymaking] meetings of the year,” he said.

The Fed meets November 1-2 to discuss monetary policy and is widely expected to raise its benchmark interest rate by three-quarters of a percentage point for an unprecedented fourth time in a row.

However, that pace is unsustainable, said Dean Baker, senior economist at the Center for Economic and Policy Research. He said that a monthly job gain of around 200,000 would be better for the Fed.

The pandemic forced restaurants to incorporate online ordering, pick-up and delivery on a greater scale, and customers became more comfortable in using those services, he said. He said that business travel hasn’t recovered fully, and that the rise of competitors like Airbnb could result in less demand for hotel stays.

In addition, while private sector employment returned to pre-pandemic levels earlier this year, public sector employment remains nearly 600,000 jobs, or 2.6%, below levels seen in February 2020, BLS data shows.

The recovery remains uneven, and it’s growing more complex as the labor market starts to feel the influence of the Fed’s series of supersized rate hikes, Pollak said.

While declines in these sectors are anticipated during a period of high interest rates, what could be a troubling sign are net job losses in crucial support industries such as local education, child care and trucking, said Russell Weaver, an economic geographer with Cornell University’s ILR School.

Weaver said supply chain concerns and the ability of people to return to the workforce are some of the large ripple effects of those and other sectors. It can impact parents’ economic and work prospects in the long run.

“We’re not sensing that a recession is imminent,” said Dionne Nelson, Laurel Street’s chief executive officer and founder. “We’re still very busy. We are still looking for employees. Our markets are still very active.”

Job growth eased slightly in September but remained robust, indicating that the economy was maintaining momentum despite higher interest rates. But the strong showing left many investors unhappy because they saw signs that the fight against inflation may become tougher and more prolonged.

The labor market appears to have avoided many of the scars of the last recession. Long-term unemployment is as low as it has been in 20 years. Since the 1960s, the unemployment rate hasn’t been lower. 80.2 percent of Americans in their prime working years had a job in September, which is higher than in the year before the epidemic, despite claims that no one wants to work anymore.

The pandemic left a lasting mark on the U.S. economy. More people are working in warehouses today than in February 2020. Child care remains in short supply, forcing some parents — a disproportionate share of them women — to work part-time or not at all. The researchers have come up with different estimates as to how many people are being kept out of work by “Long Covid”.

Getting there has been bumpy. As vaccines became widely available and businesses reopened last year, employers suddenly had more jobs to fill than applicants available to fill them. That was good news for workers, who were able to jump between jobs and negotiate for higher pay. But it almost certainly helped feed into inflation, as businesses raised prices to cover higher labor costs.

The job market isn’t nose-diving. Despite the fact that the number of jobs added in September was the lowest in more than a year, it was still a good gain. Layoffs remain extremely low; fewer people are getting jobs, but we haven’t seen any meaningful increase in the number of people losing them.

There is simple logic behind Powell paying attention to job openings. They are a direct way of seeing demand because employers do not try to hire when no one is buying their products. When lots of companies are hiring, they have to pay more to compete for workers in order to keep them.

Economists see quitting as a sign of confidence among workers: Changing jobs is a risk, so people avoid doing so if they’re worried about the economy. And since people typically don’t jump employers without a bump in pay, job-switching contributes to wage growth. In October, people who switch jobs see their pay rise roughly twice as quickly as people who stay put, according to data released by the payroll processing giant.