The job market slowdown is getting hard to ignore
inflation, as I suggested last week was one possibility. Neither argument captures the nuance of labor market changes this year, and how workers should be thinking about their job prospects going forward. While the odds of getting laid off remain very low, for the small — but growing — percentage of people who are either unemployed or looking to change jobs, conditions are arguably worse now than they’ve been in more than five years, outside of the pandemic.
It’s important not to gloss over this reality because a number of signs point to a continuing deterioration so long as the Federal Reserve keeps interest rates at a level that restrains the economy. The softness beneath the surface of the labour market is being masked by a strength that’s easy to see. The unemployment rate, at 3.9% in October, is still historically low as is the rate at which people are being laid off.
The percentage of prime-age Americans who have jobs — categorized as those between the ages of 25 and 54 — is at 80.6%, higher than it was at any point between 2002 and 2019. It’s accurate to say that a notably large percentage of Americans have jobs, and that they feel pretty secure in those jobs. That’s the good news.
For people who are unemployed or not in the workforce but looking to find a job, the labour market can be best described as balanced, with a bias toward worsening rather than strengthening. The rate at which workers were being hired in September was flat for a third consecutive month, holding at post-pandemic lows that resemble the environment we saw between 2015 and 2017. These were a decent few years for workers but not as strong as 2019 or 2022.
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