Heading into 2023, there were questions about how the economy – and more specifically the job market – would shake out. Inflation was causing concerns for the Fed and American workers alike, while many wondered how long the historically low unemployment could be sustained.
Now, with the first quarter of the year behind us and three months of Jobs Report data from the U.S. Bureau of Labor Statistics to examine, it looks like the employment market is in as good a shape, if not better, than many in the industry and in Washington, D.C., could’ve hoped for.
Starting with the first quarter of 2023, Yoh is examining the Jobs Report data to identify key trends and insights to inform both employers and employees about how it may impact the hiring market in the short- and long-term future. Here are our topline takeaways from the 2023 Jobs Report data through the most recently released report from March. Full analysis can be found in the Q1 Hire Analysis report.
RAPID ANALYSIS – JOB MARKET REMAINS BETTER THAN EXPECTED DESPITE COOLDOWNS
The March Jobs Report saw the U.S. add 236,000 more jobs. While that is a marked decrease from gains that January (+472,000 jobs) and February (+326,000 jobs) had, the data still paints a positive picture on the employment outlook in the U.S. when compared to previous years – especially those prior to the pandemic. At this point, job candidates still maintain the upper hand in negotiations with employers as demand for employees remains high almost across the board and the unemployment rate continues to stay at or near record lows.
INDUSTRY BREAKDOWN – THOSE SENSITIVE TO BORROWING COSTS LOST JOBS OR STAYED FLAT
Understandably, some industries have been more impacted by increasing interest rates than others during the first quarter of 2023. Those more sensitive to borrowing costs – warehousing (+0.2%), retail (-.1%), manufacturing (+/- 0.0%), construction (-0.1%) and financial activities (+/- 0.0%) either lost some jobs or stayed flat over the quarter. Industries that are less susceptible, including professional and business services (+0.2%), private education and health (+0.3%), leisure and hospitality (+0.4%) and government (+0.2%), all saw measurable increases in jobs when seasonally adjusted.
TAKEAWAYS FOR EMPLOYERS – HIGHLY SKILLED WORKERS REMAIN IN HIGH DEMAND
The job market is certainly cooling from its peaks in 2022, which was a goal of the Biden Administration this year, but those employers seeking highly skilled, highly paid workers are likely to continue to struggle filling their roles with high-performing talent. Especially without the help of seasoned talent professionals. Now more than ever, organizations who provide business services, healthcare, education, information, and more should consult with recruitment experts about how to manage the demand for skill in a world of continually shrinking availability.
TAKEAWAYS FOR EMPLOYEES – SO MUCH FOR “NOBODY WANTS TO WORK ANYMORE”
Data from the Jobs Report showed that the share of Americans aged 25 to 54 who were working, which is what most economists consider to be an individual’s prime working age, increased to 80.7% in March 2023. This is the highest this rate has been since 2001.
Following the pandemic, the U.S. has seen a steady increase in wages, which is drawing more young and middle-aged Americans back to work. Always a somewhat ridiculous thought, the idea that “nobody wants to work anymore” was never true. The reality is that few people want to work in a job they don’t like or for a company that does not prioritize a strong employment experience. Those organizations that take the time to find workers suited for the roles they’re looking to fill and redefining what it means to be an employee in today’s market will be better suited now (and always) to land those higher-performing candidates.
The Jobs Reports for the first quarter of 2023 could indicate significant changes to come for the remainder of the year. Few expect the job market to remain as challenging for employers as it has been over the past 12 to 18 months, but how quickly that changes is yet to be determined. Monitoring how trends in employment are evolving is a core component of any talent retention and acquisition strategy.
For more insights into the Jobs Reports for Q1 2023, click here.