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The hip job market continued to show rapid growth in July, with employers adding 528,000 jobs despite recession fears.
The unemployment rate fell to 3.5 percent, according to the Bureau of Labor Statistics. In July, the labor market continued to show impressive growth, giving workers historic wage increases and more influence over their jobs.
While employment in the leisure and hospitality sectors led to gains, with 96,000 new jobs added in July, there were huge gains across a wide range of categories. Professional and business services added 89,000 jobs, with increases in architectural and engineering services, technical consulting, and scientific research and development. The healthcare sector has created 70,000 jobs, mostly in healthcare services and hospitals and nursing homes. Jobs also grew in government, construction, manufacturing, and even mining.
“This is a job market that just won’t stop,” said Becky Frankiewicz, president of ManpowerGroup North America. “Economic indicators are showing caution, but US employers are showing confidence. The economy is in a tug-of-war between risk and resilience. The empowered worker is still in charge.”
The July jobs report showed little sign of slowing down and proved a pillar of strength for an economy that was facing severe headwinds. Other indicators, notably inflation at a 40-year high and six months of negative economic growth, paint a less rosy picture. Financial markets have lost trillions of dollars in value this year, and a measure of consumer sentiment hit a record low in June.
A slowdown in job growth would have indicated that the Fed’s rate hikes are on target to cool the job market. As the Fed continues to hike interest rates and borrowing more expensive for households and businesses, workers are likely to have less impact on the job market than they did earlier this year. Higher interest rates could also lead to a wave of layoffs.
White House officials said Thursday they expected fewer jobs, particularly with record-breaking growth numbers last year that often topped 400,000 a month. White House press secretary Karine Jean-Pierre said officials expect the numbers to fall to closer to 150,000 jobs a month, calling the transition a sign of a “healthy economy.”
Most private-sector workers are seeing wage increases being wiped out by inflation, and a record number of Americans have taken on two full-time jobs. Government workers, whose wages lag behind the rest of the workforce, suffer even more from inflated prices for gas, food and housing.
The number of Americans who are quitting their jobs remains high, albeit lower than the peak earlier this year. A record number of workers quit their jobs last year, a phenomenon known as the “Big Layoff” as a hot labor market spurred by the pandemic gave workers greater leverage to earn higher wages and better conditions demand, particularly in the leisure and hospitality industries. While data suggests this trend is also slowing, the smoking cessation rate remains at a 20-year high.
Elenna Geffrard, a foreign aid case manager, recently resigned from her job in New York because she found a better-paying job with fewer cases elsewhere.
“I’m quitting because I’m finished, and they’ve given us more cases to take care of,” Geffrard said. “I have 40 cases to monitor. In my new job, I get better pay and only have 20 cases.”
It wasn’t easy finding a new job, Geffrard said. She applied to about 40 over the past year before getting her offer last week.
Job listings also slowed in June compared to previous months, with notable declines in retail and wholesale as consumer demand shifted away from goods towards services such as dining out, going to the movies and travel.
The number of layoffs reported in June remained steady despite mounting media reports of job losses in the technology, advertising and healthcare sectors. In June, the layoff rate in the information sector, which includes technology, rose to 1.3 percent from 0.9 percent. Netflix, MasterClass and Coinbase laid off hundreds of employees in June. However, most employers seem to be holding on to their employees. Also, workers who lose their jobs seem to find new jobs quickly.
“There is no doubt that some employers are just emerging from a period when labor markets have been unusually tight, so they may be reluctant to lay off employees as they would have done prior to this period of labor shortages,” Groshen said.
Geneva Tucker, a research analyst in Kansas City, Kansas, was fired from the Kansas Department of Health and Environment in May over budget cuts. Since then, Tucker has unsuccessfully applied for around 200 research positions.
“I was initially looking for a similar job, but it wasn’t an easy process,” said Tucker, who has a degree in microbiology. “At this point, I’m trying to only apply to jobs where my experience is relevant and where the pay is decent.”
Unemployed for two months, she is receiving unemployment benefits and can barely make ends meet. She’s even reduced her staples.
“It’s a real struggle just to make ends meet,” Tucker said. “When gas is $5 a gallon, it’s really hard to drive to job interviews because I can’t afford gas. It seems extremely unfair to me to come to this point with all this experience and my degree where I struggle every day.”
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