A buoyant US labor market over the past two years has been a rare bright spot in a decent economic recovery from the pandemic, with strong job growth bringing the nation’s unemployment rate near a 50-year low. But with a possible recession, many companies are now putting the brakes on hiring in the so-called knowledge sector.
Lyndall Cairns, a 41-year-old product marketer, left his job at a startup in March to look for work at a more established company that would offer more growth opportunities. Since then, the Washington, D.C., resident estimates she’s submitted 1,500 applications but only interviewed 20 for the new position.
“The conversion rate is too high – I wouldn’t put it in the context of marketing on my CV,” he joked.
“I’m definitely finding it less efficient than previous job searches,” he said of his job search. “The hardest part is feeling like I’m shouting into a void. You just don’t know — for every application, does the job exist, is the job still open, are you a good fit, is it a good wage, do they already have someone they’re interviewing. ?There’s a lot you can’t see.”
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Across the United States, it’s worth noting, employers are still hiring Payrolls rose 230,000 in March, while the number of unemployed workers is near historic lows.
Yet there is a marked slowdown in hiring for many white-collar jobs as businesses a Possible recession. According to Indeed’s research, listings for tech roles are down 55% from a year ago, while banking industry vacancies are down more than 40% and insurance listings are down 18%.
“A lot of businesses are just uncertain right now, either about the medium-term economic outlook, or they’re worried that their current employment levels aren’t commensurate with where their business is headed,” Nick Bunker, director of North American research at Indeed’s Hiring Lab, told CBS MoneyWatch.
It’s leading companies to lag behind in hiring, especially in areas like marketing and human resources, he adds.
In some ways, the situation is the opposite of the first year of the pandemic. Low-wage service jobs, especially in leisure and hospitality, are still plentiful as Americans go out and spend money. But recruitment of professional and knowledgeable staff has slowed down.
“At the 10,000-foot level, the job market is very strong,” Bunker said. However, “things are happening very differently in different working-class neighborhoods.”
pulled back
Bunker said several pockets of the corporate workforce were hit hardest by the hiring slowdown. One is marketing, an area companies often cut when their business takes a hit and they want to cut costs. Corporate recruitment opportunities and human resources more broadly are drying up.
“We’re hearing from many business executives that demand is much softer than it was a year ago,” said Gregory Dako, chief economist at EY. “It’s not just the technology sector – it’s expanded more broadly into the finance, professional and business services, information sectors.”
Another sign of this cooldown is that workers are putting in fewer hours. The length of the typical workweek, which increased during the pandemic, has fallen to pre-pandemic levels. If those hours are even shorter, Dako said, it would show that employers are “trying to reduce their workforce.”
And while layoffs outside the tech sector remain at historic lows, the number of workers filing for unemployment continues to rise, indicating that it may take longer for those laid off to find work.
“The US economy is losing momentum, and the landing strip is short and narrow,” Daco said in a research note.
“I just have to keep going”
This does not mean that a recession is inevitable. The economy is still expanding, growing at an annual rate of 1.1% First three months of the year, and none of the indicators that typically precede recessions — including various measures of employment, spending and personal income — are flashing red, noted Torsten Slok, Apollo’s chief economist. Analysts at Vital Knowledge said in a research note that construction and travel industries and high-end consumer spending held up well, and a “manufacturing renaissance” emerged after Congress poured billions into domestic industries.
“There is no doubt that the US economy is cooling,” they wrote. “However, ‘cooling’ does not mean ‘crashing’.”
Indeed, a cooldown without a crash would be the definition of the “soft landing” the Federal Reserve has sought to achieve.
Yet, employee confidence levels are far below where they were Major days of 2021 and 2022 As the economy was snapping back into shape.
One software engineer, who asked to remain anonymous to avoid possible retaliation from his employer, said he applied to 60 jobs without a single response — a stark contrast from his previous job-hunting experience during the pandemic, where “almost every place I applied to I did, I had an interview and then within a month I had the job.”
“It’s very worrying – I thought I was in a safe industry,” he said.
Indeed, research bears out this loss of confidence, Bunker said. In a recent survey, most people said they could easily find a job, but “those who were employed and had a higher education level, became more pessimistic.”
Cairns, the product marketer, chooses to remain optimistic.
“It was a gamble when I left because I know what the job market is, but you have to be happy,” he said. “This isn’t my first rodeo. I know how to get a job, and I know one will come along that will be a good fit. I just have to keep going.”