The U.S. economy has added more than two million jobs over the past year.
But more people who are out of work are having a hard time getting back in.
As of November, more than seven million Americans were unemployed, meaning they didn’t have work and were trying to find it. More than 1.6 million of those jobless workers had been job hunting for at least six months, according to the Labor Department. The number of people searching for that long is up more than 50% since the end of 2022.
On average, it now takes people about six months to find a job, roughly a month longer than it did during the postpandemic hiring boom in early 2023, according to the Labor Department. The pain is largely in high-paying white-collar jobs, including in tech, law and media, where businesses grew fast when the economy reopened from the pandemic but now have less need for new hires.
A labor market that looks healthy in the headlines is, under the surface, weaker than it seems. The unemployment rate, at 4.2%, remains well below the average during the decade before the pandemic. But there is now just about one job posting per unemployed worker, down from two in early 2022. Strong hiring has narrowed to a thin set of industries. The government’s monthly jobs report on Friday will provide another snapshot of the market’s health.
More people getting unemployment benefits are drawing on public aid longer. New data released last week from the Labor Department show that 1.8 million people continued to file for previously granted unemployment benefits as of late December, near the postpandemic high.
Year-over-year wage growth has fallen to 4%, down from about 6% at the height of the early 2020s hiring spree. That’s a sign that many employers don’t have to jostle so hard to attract workers.
To date, the labor market has been weakening primarily due to less hiring—not widespread layoffs.
But once companies decide to reduce payrolls, job cuts often snowball quickly, which could spark a much faster jump in the unemployment rate, said Veronica Clark, a Citigroup economist.
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@5TTZB4VCentre-Right1yr1Y
The "healthy" job market is a myth. 1.6M people job hunting for 6+ months and it's mostly hitting white collar workers hard. Companies that went on hiring sprees during the pandemic are now pulling back. Classic boom-bust cycle.
But we've added 2M jobs this year! 4.2% unemployment is historically low. People are cherry-picking negative stats to paint a doom scenario. The job market is rebalancing, not crashing.
So all of us who pointed out that most of those rosy employment numbers (often later revised downward) were for jobs in government or went to non-Americans were correct all along. Huh.
What worries me is the length of unemployment. 6 months average job search vs 5 months last year. That's a significant change, especially for people with mortgages and families.
@NeedyCow1yr1Y
The wage growth slowdown (4% vs 6% previously) is actually healthy for fighting inflation. But the extended unemployment benefits data is concerning - 1.8M continuing claims is a red flag.
Important context: The issue isn't mass layoffs - it's slower hiring. Big difference. The 1 job opening per unemployed worker is still better than pre-pandemic averages. Let's not panic.
Speaking from experience, the tech sector is definitely cooling. Seeing lots of senior candidates who've been searching 6+ months. Companies that were throwing money around in 2022 are now being super selective.
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