Labor market remains surprisingly robust despite concerns about the economy
Even as manufacturers became gloomier, according to a report released Wednesday, they stepped up hiring
By Justin Lahart – Wall Street Journal
A lot of businesses are feeling morose about where the economy is heading. And yet they still are looking to hire more workers.
The Labor Department on Wednesday reported that there were a seasonally adjusted 10.5 million unfilled job openings in the U.S. as of the last day of November, about equal to the (upwardly revised) count for October. That was down from the extremes hit earlier last year, but still far above anything seen during the pre-pandemic period.
As for the job cuts announced in November by big companies such as Amazon.com, Twitter, and Facebook parent Meta Platforms, they still aren’t making much of a dent in the overall job market.
There were a seasonally adjusted 1.4 million layoffs and discharges in November. That was about even with October and up just a bit from November 2021’s 1.3 million. In the year before the pandemic, when the job market was plenty strong, there was an average of about 1.8 million layoffs a month. Moreover, Wednesday’s report showed that the number of workers quitting their jobs in November remained elevated—an indication that people are finding job opportunities elsewhere.
The recent headlines about tech layoffs don’t seem to match broader economic indicators, which show a strong job market and a historically low unemployment rate. WSJ’s Gunjan Banerji explains the disconnect. Illustration: Ali Larkin
Contrast the job openings report with the Institute for Supply Management’s monthly manufacturing report, which also came out Wednesday. The ISM’s index of manufacturing activity came in at 48.4 for December, down from November’s 49. Anything below 50 indicates factory output is contracting. But an employment subindex within the report rose to 51.4 last month from 48.4—an indication that even as manufacturers became gloomier, they
It isn’t just manufacturers who are feeling pessimistic. The Business Roundtable’s index of optimism among chief executives registered continued deterioration in the fourth quarter. A quarterly survey conducted by Duke University, the Federal Reserve Bank of Atlanta and
the Federal Reserve Bank of Richmond showed that chief financial officers were similarly downbeat.
Perhaps it is just a matter of time before the job market catches up with the dour predictions emanating from corner offices—and clearly the more the Fed raises rates this year, the harder it will be for the economy to keep generating jobs.
But it could also be that the big companies that tend to dominate surveys are providing an incomplete picture of the job market. Public companies are more geared toward producing and selling goods than the economy at large, which is more service-oriented and additionally have watched their share prices slide sharply over the past year. Jefferies economists point out that businesses with fewer than 250 employees accounted for a record 78.4% of private-sector job openings in November.
Regardless of the reason, for now, at least the job market looks strong. A recession might be coming in 2023, but it sure hasn’t started yet.