I might be one of the few the recruiting industry who review the numbers released monthly by the Bureau of Labor with a raised eyebrow. Although the bureau is supposed to be agnostic politically, I can’t help but to remain a tad cynical when they release the monthly information. This week, the headlines read “US Job Market Powers Ahead”-but is it really?
First, let’s go through the numbers.
U.S. nonfarm payrolls increased 431,000 in March, according to the BLS, after the prior two months were revised upward by a net 95,000 total job gains. The unemployment rate declined to 3.6% from 3.8% in February, now sitting on top of its pre-crisis low of 3.5%. The drop in the unemployment rate is because 738,000 people got jobs and 418,000 people entered (or re-entered) the workforce given the decline in Omicron cases. Against the backdrop of a hot jobs market, earnings climbed even higher, with wage gains up by 5.6% on a year-over-year basis.
Simply reading the numbers, one would think things are going well, and they are but we are not anywhere close to being out of the eye of the storm. We continue to experience bottlenecks in the jobs market with almost 3 million more jobs than seekers currently posted. The labor force participation rate, at 62.4 percent, remains below its February 2020 rate of 63.4 percent but let’s not forget it is still a pre-pandemic 45-year low. This does not scream “powering ahead”.
Fewer people in the job market, underpinned by a long-term demographic trend, is allowing talented workers to have more options and they’re going where their needs are met, according to Randstad NV, a global provider of employment services. Many in the industry are ready to shake off the effects of COVID and the Great Resignation but it isn’t that easy. The Great Resignation has been a boon to employees searching for better working conditions and overdue market pay rates. As the economy begins to show signs of a bounce-back from the pandemic, potential employees still want work from home options and equitable pay.
These compressions have made it easier for employees to quit unappealing positions with a sucky culture, poor pay, or unrealistic work hours. If the pandemic did anything to the job market, it created more opportunities through a brutal reality check for employers on the value of their employees.
So before we start throwing parties like an armageddon movie from the early 2000’s, let’s remain realistic and agree we are not out of trouble yet. As the workforce participation rate continues to remain stagnant or decline, employers will continue to be challenged to find ways to attract and retain top talent in a market driven by the candidate.
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