How will inflation affect the hot labor market?
 | FRI, MAY 06, 2022 | | | |
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| | | TECH, TRANSFORMATION AND THE FUTURE OF WORK | | | |
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Welcome to the CNBC @Work newsletter, brought to you by CNBC Events. Think a friend, colleague or business partner should receive this newsletter? Subscribe here. Despite fears of a slowdown, job growth remained strong in April as nonfarm payrolls grew to 428,000, slightly above the estimate of 400,000. Meanwhile, unemployment remained steady at 3.6%. Leisure and hospitality led with the addition of 78,000 jobs. Unemployment in the sector fell to 4.8%, significantly lower than the 39.3% high in April 2020. This is a promising sign as the economy opens back up and Americans are returning to pre-pandemic activities. So far in 2022, there has been steady job growth as the unemployment rate has come down to 2019 levels. However, with wage growth rising 5.5% in April from a year ago, inflation continues to impact the economy. In an effort to combat it, the Federal Reserve raised interest rates by half a percent to its highest level in 20 years and it's widely expected that the Fed will issue more rate hikes throughout this year. What will this mean for the job market? Most likely, as the Fed tightens monetary policy, the hot labor market will begin to cool down.
If Fed Chairman Powell is able to cool the economy down without pushing it into recession, this could be good news. In March, the gap between available workers and job openings was at a record high of 5.6 million. The ideal would be for job openings to decrease while unemployment remains low, because a calmer labor market is ideal for a steady economy.
For more on the world of work, check out our Key Stories roundup below. Until next time, stay safe, stay healthy and stay in touch. |
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| Employment openings exceeded the level of available workers by 5.6 million in March while a record number of people quit their jobs, the Labor Department reported Tuesday. The level of job postings hit 11.55 million for the month, also a fresh record for data that goes back to December 2000, according to the Job Openings and Labor Turnover Survey. That was up 205,000 from February and representative of a jobs market still historically tight. |
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| Worker productivity fell to start 2022 at its fastest pace in nearly 75 years while labor costs soared as the U.S. struggled with surging Covid cases, the Bureau of Labor Statistics reported Thursday. Nonfarm productivity, a measure of output against hours worked, declined 7.5% from January through March, the biggest fall since the third quarter of 1947. At the same time, unit labor costs soared 11.6%, bringing the increase over the past four quarters to 7.2%, the biggest gain since the third quarter of 1982. The metric calculates how much employers pay workers in salary and benefits per unit of output. |
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| After more than a year of record turnover, recruiters are going to extreme lengths and working as fast as ever to scoop up candidates. But there is such a thing as getting a job offer too fast, recruiters say, and it can make the talent crunch even worse. One survey from the Muse found 72% of young job-seekers have felt a sense of surprise or regret that a new job wasn't what they expected it to be, and roughly 60% say they would quit within six months if a new job didn't live up to their expectations. |
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Evolve Livestream: Sustainable Solutions to the Resource Shortfall | May 12 As innovation accelerates at an unprecedented pace, so does demand for resources – be it raw materials, human capital, or real estate. Business leaders are now tasked with staying ahead of the supply constraints amid heightened geopolitical tensions; finding a skilled workforce to bring products to market, and balancing consumer demand and higher inflation. We convene a panel of experts to discuss how to deal with rising costs and create new solutions to short and near-term resource challenges to lead in uncertain markets. Learn more and register here. |
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