Category Archives: Labor Market Participation Rate

February Jobs Report-U.S. Hiring Remains Strong

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The labor market showed resiliency in February, adding 275,000 jobs, a sign that economic growth is still solid.

If the economy is slowing down, nobody told the labor market.

Employers added 275,000 jobs in February, the Labor Department reported Friday, in another month that exceeded expectations.

It was the third straight month of gains above 200,000, and the 38th consecutive month of growth — fresh evidence that after surging back from the pandemic shutdowns, America’s jobs engine still has plenty of steam.

“We’ve been expecting a slowdown in the labor market, a more material loosening in conditions, but we’re just not seeing that,” said Rubeela Farooqi, chief economist at High Frequency Economics.

The previous two months, December and January, were revised down by a combined 167,000 jobs, reflecting the higher degree of statistical volatility in the winter months. That does not disrupt a picture of consistent robust increases, which now looks slightly smoother..

At the same time, the unemployment rate, based on a survey of households, increased to a two-year high of 3.9 percent, from 3.7 percent in January. A more expansive measure of slack labor market conditions, which includes people working part time who would rather work full time, has been steadily rising and now stands at 7.3 percent.

The unemployment rate was driven by people losing or leaving jobs as well as those entering the labor force to look for work. The labor force participation rate for people in their prime working years — ages 25 to 54 — jumped back up to 83.5 percent, matching a level from last year that was the highest since the early 2000s.

Average hourly earnings rose by 4.3 percent over the year, although the pace of increases has been fading.

“We’ve recently seen gains in real wages, and that’s encouraged people to re-enter the labor market, and that’s a good development for workers,” said Kory Kantenga, a senior economist at the job search website LinkedIn. As wage growth slows, he said, the likelihood that more people will start looking for work falls.

As late as last fall, economists were predicting much more modest employment increases, with hiring concentrated in a few industries. But while some pandemic-inflated industries have shed jobs, expected downturns in sectors like construction haven’t materialized. Rising wages, attractive benefits and more flexible work schedules have drawn millions of workers off the sidelines.

Elevated levels of immigration have also added to the labor supply. According to an analysis by the Brookings Institution, the influx has approximately doubled the number of jobs that the economy could add per month in 2024 without putting upward pressure on inflation, to between 160,000 and 200,000.

Health care and government again led the payroll gains in February, while construction continued its steady increase. Retail and transportation and warehousing, which have been flat to negative in recent months, picked up.

No major industries lost a substantial number of jobs. Credit intermediation continued its downward slide — that sector, which mostly includes commercial banking, has lost about 123,000 jobs since early 2021.

That doesn’t mean the employment landscape looks rosy to everyone. Employee confidence, as measured by the company rating website Glassdoor, has been falling steadily as layoffs by tech and media companies have grabbed headlines. That’s especially true in white-collar professions like human resources and consulting, while those in professions that require working in person — such as health care, construction and manufacturing — are more upbeat.

“It is a two-track labor market,” said Aaron Terrazas, Glassdoor’s chief economist, noting that job searches are taking longer for people with graduate degrees. “For skilled workers in risk-intensive industries, anyone who’s been laid off is having a hard time finding new jobs, whereas if you’re a blue-collar or frontline service worker, it’s still competitive.”

The last few months have been studded with strong economic data, leading analysts surveyed by the National Association for Business Economics to raise their forecasts for gross domestic product and lower their expectations for the trajectory of unemployment. It’s occurred even as inflation has eased, leading the Federal Reserve to telegraph its plans for interest rate cuts sometime this year, which has raised growth expectations further.

Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas, helped tabulate the survey responses. He said the mood was buoyed partly by fading trepidation over federal government shutdowns and draconian budget cuts, after several close calls since the fall. And he sees no obvious reason for the recovery to end soon.

“Once it starts going, it keeps going,” Mr. Jebaraj said. “You had this external stimulus with all the trillions of dollars of government spending, Now it’s sort of self-sustaining, even though the money’s gone.”

U.S. economy adds whopping 353,000 jobs in January as labor market heats up

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https://www.axios.com/2024/02/02/us-jobs-report-january-2024

The U.S. economy added 353,000 jobs in January, while the unemployment rate held at 3.7%, the Labor Department said Friday.

Why it matters: 

The first look at the 2024 labor market shows it’s on fire — not slowing down as previously thought.

Details: 

The January payroll figures show hiring picked up from the 333,000 added the prior month, which itself was revised higher by 117,000.

  • Job gains in November were revised slightly higher, too, by 9,000 to 182,000 jobs added.

What’s new: 

The hiring boom last month came amid strong job gains in health care, retail and professional and business services, while mining and oil and gas extraction are among the sectors that shed jobs.

  • Meanwhile, the labor force participation rate — the share of workers with or looking for a job — was 62.5% in January.
  • Average hourly earnings, a measure of wage growth, soared by 0.6%. Over the past 12 month, average hourly earnings increased by 4.5%.

The big picture: 

The data is the latest in recent weeks to show that the economy is revving up, with fading inflation and steady hiring — a welcome development for the Biden administration that is touting its economic agenda ahead of the 2024 election.

The intrigue:

The strong growth in both jobs and earnings will make the Federal Reserve reluctant to cut interest rates soon, out of fear that labor market strength could reverse progress on inflation.

  • Already this week, Fed chair Jerome Powell threw cold water on the idea of a March rate cut.

The bottom line:

Despite high profile layoffs at media and technology companies, the report shows that broader labor market is heating up.

More Americans over 65 are working — here’s why

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https://www.axios.com/2023/12/14/older-american-adults-working-wages-economy

An increasing number of Americans age 65 and older are working — and earning higher wages, per a study from the Pew Research Center out Thursday.

Why it matters: 

This is good for the economy, especially as the U.S. population ages — but whether or not it’s good for older Americans is a bit more subjective.

Zoom in: 

The share of older adults working has been steadily increasing since the late 1980s, with a detour during the pandemic as older folks retired in greater numbers. Several forces are driving the shift:

  • Older workers are increasingly likely to have a four-year degree, and typically workers with more education are more likely to be employed.
  • Technology has made many jobs less physically taxing, so older workers are more likely to take them.
  • Meanwhile, changes in the Social Security law pushed many to continue working past 65 to get their full retirement benefits.
  • At the same time, there’s been a shift away from pension plans, which typically force people out of a job at a certain age, into 401(k) style plans that are less restrictive (and less generous, critics say).

By the numbers: 

Last year, the typical 65+ worker earned $22 an hour, up from $13 (in 2022 dollars) in 1987. That’s about $3 less than the average for those age 25-64, and the number includes wages of full- and part-time workers.

Be smart: 

Before Social Security existed, older people worked — a lot. In the 1880s, about three-fourths of older men were employed, said Richard Fry, senior researcher at Pew. They also didn’t live as long.

  • Meanwhile, the 65+ age group is a fast-growing one — by 2032 all the baby boomers will be in this category, per the BLS’s projections, and their increased workforce participation is good for an economy that is struggling with long-term labor shortages.

The big picture: 

“If people are working longer because they find purpose in their jobs and want to stay engaged, that’s good for them individually,” said Nick Bunker, head of economic research at Indeed Hiring Lab.

  • It’s also good for the productive capacity of the economy, and the firms where they work. “Older folks have lots of experience and knowledge to pass down,” he said.
  • Yes, but: If there are people who want to retire, but can’t because of financial constraints, “that’s bad,” he added.

What to watch: 

The share of older adults working peaked before the pandemic — will it surpass those levels?

  • The number hasn’t bounced back as much as anticipated partly because older Americans benefited hugely from the stock market surge and real estate gains of the past few years — and didn’t need to work anymore.

U.S. economy adds 339,000 jobs as labor market stays hot

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https://www.axios.com/2023/06/02/may-jobs-report-employment

The U.S. economy added 339,000 jobs in May, while the unemployment rate jumped to 3.7% from 3.4%, the Labor Department said Friday.

Why it matters: 

Job gains came in well above forecasters’ expectations — the latest sign that the economy is still underpinned by a hot labor market.

  • Economists expected a gain of 190,000 jobs last month. The May jobs figures are a pickup from the 294,000 added in April, which was revised up by 41,000. Job gains in March were revised up, too.

Details: 

Economic policymakers have kept a close eye on other details from the payrolls report — whether more Americans are joining the workforce and how quickly pay is rising.

  • The labor force participation rate — the share of workers with a job or hunting for one — held at 62.6% in May.
  • Meanwhile, average hourly earnings, a measure of pay, rose by 0.3% in May. Compared to the same period a year ago, wages are up 4.3%.

What we’re watching: 

The May jobs report is among the final data points Federal Reserve officials will consider before deciding whether to continue the interest rate hiking campaign that began more than a year ago.

  • Inflation remains too high, and there are concerns that rapid price gains are being fueled by the tight labor market and strong consumer demand.
  • Still, a top Fed official this week signaled the central bank may skip a rate hike at its meeting later this month.

U.S. labor market booms in April, adding 253,000 jobs

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https://www.axios.com/2023/05/05/april-jobs-report-economy?stream=top&utm_source=alert&utm_medium=email&utm_campaign=alerts_all

The labor market added 253,000 payrolls in April, while the unemployment rate dipped to 3.4% — a historically low level.

Why it matters:

Job growth continued to boom last month, the latest sign that economy has strong momentum despite recent bank failures.

  • Economists expected a gain of 185,000 jobs last month.

Details:

The April job figures are a pickup from the 165,000 jobs added the previous month, which were revised down by 71,000, the Labor Department said on Friday.

  • The Labor Department said that jobs growth in the previous two months was lower than first estimated: jobs growth was revised down by a combined 149,000 for February and March.

The big picture:

In recent months, more Americans have joined the workforce, helping to ease labor force shortages.

  • The labor force participation rate — or the share of workers employed or looking for work — held at 62.6% in April.
  • Average hourly earnings, a measure of wage growth, rose to 0.5% in March. Wages rose 4.4% from the same time last year.

Where it stands:

The Federal Reserve has been concerned about an out-of-balance labor market that it fears could stoke inflation that’s already running high.

  • But Fed Chair Jerome Powell said this week that there were signs that the workforce was “coming back into better balance,” though it remained “very tight.”

Rebound in Labor Supply

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https://www.axios.com/newsletters/axios-macro-de25daf9-6a2e-4b5a-aedb-b94442e44533.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmacro&stream=business

One of the most persistent economic narratives of 2021 and 2022 was that of missing workers. Many Americans seemed to have simply vanished from the labor force during the pandemic, leaving employers in a lurch.

  • That’s no longer the case, White House economists argue in a new post presenting evidence that labor supply has returned to its pre-pandemic trend.

Why it matters: 

It would be way less painful if the U.S. labor market were to come into a better, non-inflationary balance because labor supply increased, rather than labor demand decreased.

  • And contrary to a widespread economic narrative of the last couple of years, that seems to be happening — as the Biden team seeks to emphasize.

State of play: 

There has been ample speculation about why labor supply was depressed in the aftermath of the pandemic, the White House Council of Economic Advisers notes.

  • Maybe fear of COVID, or long COVID symptoms, kept people out of work. Maybe it was excess savings from the pandemic, or reassessment of life priorities, or a “collective loss of work ethic.”

Nah. It increasingly looks as if it just took some time for potential workers to match up with jobs and return to the labor force.

By the numbers: 

The share of prime-age workers — those between 25 and 54 — who are part of the workforce is now a tick higher than it was before the pandemic: 83.1%, compared with 83.0% in February 2020.

  • The overall participation rate is down (62.6%, from 63.3% in February 2020), but that is due to the Baby Boom generation retiring. It’s on track with what forecasters at the Congressional Budget Office anticipated before the pandemic.
  • Moreover, immigration rates surged in 2022 after a pandemic collapse, also adding to the supply of labor.

What they’re saying: 

“The swift but lagged response of labor supply to surging demand suggests that with time workers do respond to favorable economic conditions,” the White House economists write.

  • “There are many plausible reasons that explain why this response is lagged. Most obviously, the job search process itself is not frictionless; it may take workers some time to find a good job,” they wrote.
  • “Also, if households adapted to the pandemic in ways that can take a while to unwind (such as giving up formal child care), this would delay the labor supply response to growing demand.”

The bottom line: 

“There’s still an inaccurate view that prime-age labor supply is depressed,

that immigration is way down, and that labor force participation rates aren’t back on trend following the pandemic shock to our economy,” Ernie Tedeschi, the chief economist at the CEA, tells Axios.

  • In fact, he said, tight labor markets “pull folks back into the workforce and, while we have more to do to break down barriers to entry, the ‘missing worker’ story doesn’t quite apply anymore.”

U.S. adds solid 315,000 jobs in August

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https://www.axios.com/2022/09/02/august-jobs-report-economy?stream=top&utm_source=alert&utm_medium=email&utm_campaign=alerts_all

America had another month of solid job gains: The economy added 315,000 jobs in August, while the unemployment rate ticked up to 3.7% as more workers entered the labor force, the government said on Friday.

Why it matters: Employers continue to hire workers at a robust pace, even as the Federal Reserve raises interest rates swiftly to crush inflation.

  • Job growth eased from July’s breakneck pace, which were revised a tick higher to 528,000 jobs. Job growth in June was weaker than initially thought, downwardly revised by 100,000 to 293,000.
  • The August figures are roughly in line with economists’ expectations.

Details: Perhaps the most welcoming piece of news in the report is the influx of workers who entered the labor force last month. The labor force participation rate — the share of people working or looking for work — rose by 0.3 percentage points, after a string of monthly declines.

  • Average hourly earnings rose by 0.3%, a slowdown from the 0.5% rate in July.

The backdrop: The Fed has been bracing for some heat to come out of the labor market. It has raised interest rates at a historically rapid pace in a bid to squash elevated inflation. This report offers some good news as wage growth slowed — and more workers entered the workforce, helping ease the tightness in the labor market.

  • Higher rates work to slow demand by making it pricier for consumers and companies to borrow money, causing slower economic growth and, in turn, less price pressure.
  • “While higher in­ter­est rates, slower growth, and softer la­bor mar­ket con­di­tions will bring down in­fla­tion, they will also bring some pain to house­holds and busi­nesses,” chair Jerome Powell said last week.

Recession fears are rising. Why are people still quitting their jobs?

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Recession fears are rising. Why are people still quitting their jobs?

Interest rates are rising, inflation is lingering at four-decade highs, the economy appears to be slowing and experts fear a recession is on the way. But Americans are still quitting their jobs at near-record rates in the face of growing economic uncertainty. 

The percentage of American workers who quit their jobs set a record earlier this year and has only dropped slightly as the economy slows from two years of torrid growth. After reaching 2.9 percent this spring, the quits rate dropped to 2.7 percent in July, according to data released Tuesday by the Labor Department.

The idea of quitting a job amid a period of increased cost of living and a dubious economic future may seem counterintuitive. But the labor market has remained stacked in favor of workers, who see ample opportunities to boost their earnings to supplant increased costs from inflation.

“Despite recent declines, job openings still outnumber unemployed workers by a sizable margin, illustrating just how tight the labor market remains,” wrote AnnElizabeth Konkel, an economist at Indeed Hiring Lab, in a Monday analysis.

There were roughly two open jobs for every unemployed American, according to Labor Department data, giving job seekers ample opportunities to find new jobs with better pay or working conditions. Businesses are still scrambling to find enough workers to keep up with consumer spending — which is well above pre-pandemic levels — from a workforce that remains smaller than it was before COVID-19.

“It seems possible that employer demand would need to cool significantly more before recruiters start to notice an easing in recruiting conditions,” Konkel wrote.

In other words, employers still have too many open jobs and not enough candidates to avoid boosting wages and other perks to find talent. And that means workers still have ample incentive to quit for a better-paying job, particularly with inflation still high.

Job seekers on Indeed.com are looking for ever-higher wages, Konkel explained. The number of Indeed users seeking jobs with a $20 per hour wage rose above those seeking $15 per hour in June 2022, and the number of jobseekers looking for $25 per hour is up 122 percent over the past 12 months.

Konkel attributed the spike in job seekers looking for more money to the steady increase in advertised wages and the inflation they’ve helped to feed.

“Once job seekers know it’s possible to attain a higher wage, their expectations may shift and act as a pull factor in searching for a higher dollar amount. In this case, the shift in job seeker expectations from searching for $15 to instead $20 is clear,” Konkel explained.

“On the flip side, inflation continues to take a bite out of workers’ paychecks,” she continued, noting that only 46 percent of workers saw wage gains that outpaced inflation.

The pressure to quit for a higher paying job has been highest in the private sector, where 3.5 percent of the workforce left their current employer in July. Workers in industries with historically low wages, tough working conditions and limited teleworking options have led the charge.

The leisure and hospitality sector posted a whopping 6.1 percent quit rate in July, down sharply from 6.9 percent a year ago but still nearly twice the national quit rate.

Restaurants and bars in particular have struggled to return to pre-pandemic employment levels despite rapidly raising wages. The pressure has also made it nearly impossible for those businesses to fire or lay off employees, even amid usual season turnover.

“Hospitality companies tell us that what was once a ‘one strike, you’re out’ rule for employees who failed to show up at work without notice is now more like a ‘ten strikes, you’re out’ rule. They cannot afford to fire workers because they cannot afford to replace them,” said Julia Pollak, chief economist at ZipRecruiter.

“The decline in terminations in industries like hospitality have been so large, they have more than offset the increase in layoffs in the tech sector,” she explained.

Quits have also remained high in retail (4 percent) and the transportation and warehousing sectors (3.5 percent), with both industries facing threats from a decline in goods spending and rising interest rates.

Even so, there are some signs of waning worker confidence, which may lead to a decline in quits.

ZipRecruiter’s job seeker confidence index dropped 4.5 points in August to an all-time low of 97.8, Pollak said, with a greater number of applicants looking for job security over higher wages.

“Since the pandemic, job seekers have been looking for higher pay, less stress, and greater flexibility. In August however, job security rose to the second-place spot in their priority ranking,” Pollak explained.

“One in four employed job seekers say they feel less secure about their current job than they did six months ago. Rising risk of a recession, paired with a wave of recent tech layoffs, has made employees more concerned about the precarity of their jobs.”

U.S. adds 372,000 jobs as labor market stays robust

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https://www.axios.com/2022/07/08/jobs-report-june?stream=top&utm_source=alert&utm_medium=email&utm_campaign=alerts_all

The U.S. economy added 372,000 jobs last month, while the unemployment rate held at 3.6%, close to the lowest level in a half-century, the government said on Friday.

Why it matters: Jobs growth remains healthy, even as the Federal Reserve tries to slam the brakes on the economy to contain decades-high inflation.

  • Forecasts called for 270,000 payrolls to have been added in June.

By the numbers: Job gains in April and May were 74,000 lower than initially estimated.

  • The labor force participation rate — the share of the population employed or looking for a job — ticked down slightly to 62.2%.
  • Wages grew 5.1% from the prior year, compared to 5.2% in May.

The backdrop: There has been a spate of companies announcing layoffs, rescinding job offers and pausing hiring, though these developments have largely been concentrated in sectors like housing and technology.

Will baby boomers unretire?

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https://www.beckershospitalreview.com/workforce/will-baby-boomers-unretire.html?utm_medium=email&utm_content=newsletter

Economists are curious as to whether baby boomers who accelerated their retirement during the pandemic will return to the workforce, and if so, at what rate. 

About 2.6 million older workers retired above ordinary trends since the start of the pandemic two years ago, according to a Bloomberg report citing estimates from the Federal Reserve Bank of St. Louis. Despite this boom, applications for Social Security benefits have remained fairly flat, based on calculations by the Boston College Center for Retirement Research. About 0.1 percent of the U.S. population 55 and older have applied each month, which is in line with pre-pandemic applications.

Pandemic surges in stock and real estate values made this an “opportune time for some workers to step out of the labor force and stay out of the labor force,” Lowell Ricketts, data scientist for the Institute for Economic Equity at the St. Louis Fed, told Bloomberg. “But we’re still expecting a steady, steady trend that some might want to come back,” he noted, citing remote and hybrid work as attractors for seniors eyeing a return to the job market, particularly amid high inflation. 

Bureau of Labor Statistics data on labor participation shows that some baby boomers have come back, while many remain on the sidelines. Pre-pandemic, “unretirement” was not uncommon in the United States, due to financial hardship or personal choice. It’s still too soon to say whether the pandemic has challenged this dynamic.

Some “retirees” may have only one foot out the door, too. The Social Security Administration’s Office of the Chief Actuary suggested older people may have “retired” from one job and continued working in another, which explains why they haven’t applied for benefits, Bloomberg reports. 

Early retirements have stood to further disrupt the healthcare labor force throughout the pandemic. For instance, census microdata from the Current Population Survey provided by the University of Minnesota shows 14,500 nurses had recently retired as of March 2021, an increase of 140 percent over that figure in March 2019, according to a Pew report. The figure represents people who worked in the profession the past year but said they were now retired and not looking for work.

Read the Bloomberg report in full here.