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The latest jobs figures show that the US labor market is continuing to lose steam.
There were 8.8 million job openings in July, the Bureau of Labor Statistics (BLS) reported in its Job Openings and Labor Turnover summary. That is the lowest level since March 2021, according to the New York Times. And while private sector employment increased by 177,000 jobs in August, according to the ADP National Employment Report, it was a 52% decline from the 371,000 jobs added in July, according to TheStreet.com. Unemployment, meanwhile, grew to 3.8% in August, a rise of 0.3% from July, the BLS reported.
“This month’s numbers are consistent with the pace of job creation before the pandemic,” ADP Chief Economist Nela Richardson said in a news release. “After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.”
“Employers were cautious about the economy earlier this year,” Andy Challenger, SVP, head of sales and media at Challenger, Gray & Christmas, told HR Brew. As a result, they tightened their purse strings, resulting in “hiring freezes, renegotiating or cutting vendor contracts, and in some cases, layoffs.”
The impact on HR. There’s good and bad news for organizations looking to retain their employees. The bad news? Challenger said HR “might find they do not have the ability to hire, even in needed areas, as companies try to rein in spending, which could mean they’re dealing with frustrated hiring managers.”
The good news? “Workers are not as likely to quit their jobs right now, so HR might not have to fill vacancies as often for that reason,” he said.
In fact, job postings on Indeed are now down 15% from a year ago, Nick Bunker, director of economic research for Indeed Hiring Lab, told HR Brew.
“The quit rate has returned to its level just before the pandemic,” he said. “These trends mean that recruitment is easing up compared to the intense competition of the past several years. However, that doesn’t mean hiring will suddenly become a cakewalk. The labor market is approaching something similar to what we saw in 2019. And the pre-pandemic labor market was a competitive one for employers. Competition is weakening, but it’s still strong.”