Julia Pollak, ZipRecruiter’s Chief Economist, joins TheStreet to break down the current state of the U.S. labor market.
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00:00 And how would you characterize the labor market right now?
00:03 Would you say that it's healthy or in need of a little bit of patchwork?
00:10 So I'd say overall it is still quite healthy.
00:14 Layoffs and firings are very, very low.
00:17 We see that from a number of different data sources.
00:19 Jobless claims are low.
00:21 Mentions of job cuts in earnings calls have been declining.
00:26 So this is still a strong economy, but it is different
00:29 from what we had before the pandemic, and it is slower.
00:32 So companies are slower to hire.
00:34 They're also slower to fire.
00:35 And workers are being slower to switch jobs right now.
00:37 There may be some good in that.
00:40 Sometimes if you stay in a job longer, you become more productive there.
00:43 Companies aren't having to battle so much turnover.
00:46 But it also might mean that we've become a bit less dynamic.
00:49 So the latest data shows that there's 1.2 jobs for every job seeker.
00:55 Is it still a job seekers market?
00:57 Or has the balance now tipped for the employer?
01:01 Well, we've actually returned to the pre-pandemic level of labor market
01:04 tightness, if you use that measure.
01:06 And remember, before the pandemic, we thought this was a very tight labor market.
01:10 I mean, that's tighter than at any point since the prior 10 years.
01:14 So it's still a strong labor market.
01:18 Look, if you're a job seeker, a worker, and you're comparing
01:21 what's happening now to what happened in the middle of 2021, late 2021,
01:27 you'll be disappointed, right?
01:28 No one's rolling out the red carpet for you anymore
01:30 and offering you a massive signing bonus and raising starting pay
01:34 at the rate that they were doing so in 2021, when there was just a dogfight for talent.
01:38 That was unsustainable.
01:40 That was a once in a lifetime situation.
01:42 And when you look at the postings on ZipRecruiter,
01:46 what is the story that's coming from the jobs that are being posted,
01:53 the kind of companies that are doing the posting,
01:56 and how long it's taking for them to fill the post?
01:59 Right. So story number one, there was a two year decline in job postings
02:04 from mid 2022 onwards to now.
02:09 But that has now stabilized and we're actually seeing job postings
02:14 hold steady and tick up in May.
02:16 The other story is that the number of applicants keeps rising.
02:20 So we are seeing that labor supply is expanding.
02:24 And that means that labor competition is also expanding.
02:27 So it is getting more competitive out there.
02:29 And many jobs are seeing 10, 20, even 30 percent more applications
02:32 per posting than a year ago.
02:34 And that means if you're out looking for a job,
02:35 you really need to put your best foot forward and be very competitive
02:38 when it comes to different industries.
02:41 And we haven't really seen tech turn around yet.
02:43 Hiring is very flat and pretty slow, but there are huge pockets of strength
02:48 in AI, for example, and
02:53 health care is the big story.
02:54 But there are other places where we're seeing a lot of hiring.
02:56 One, this is an election year, so safety and security are big issues.
02:59 So actually, the most in demand skill right now is law enforcement
03:02 related skills.
03:03 Lots of police hiring is taking place as local and state governments
03:06 recover and catch up.
03:08 So I'm wondering, tech
03:11 overperformed, right, during the pandemic.
03:13 They did so much hiring.
03:14 And that's why we're seeing the research.
03:16 Is there a flip side to that?
03:17 Is there a sector that underperformed during the pandemic?
03:21 And now they're kind of returning to normal or outperforming?
03:26 Yes, a mean reversion is a major story.
03:28 The industries that did very poorly during the pandemic,
03:32 nursing homes, child care centers, those are all showing very strong
03:36 job growth now.
03:37 They've either fully recovered or are on the verge of recovering.
03:41 And the industries that did well, where companies were expanding
03:44 headcount 30 to 50 percent during the pandemic,
03:47 growth there has been flat, zero for about a year now.
03:50 Thank you.
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