The labor market paradox: layoffs and staff shortages
 | FRI, AUG 05, 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. Nonfarm payrolls rose a whopping 528,000 in July, more than double the Dow Jones estimate of 258,000. This was the largest monthly increase in jobs since February and unemployment ticked down slightly to 3.5%. In addition, average hourly earnings grew 0.5% from June and are up 5.2% year-over-year. Private sector payrolls are now higher than they were just before the pandemic in February 2020. During the pandemic, certain industries benefitted from consumers hunkering down at home. Now that the world is reopening, consumer demand has shifted. Consumers are now less interested in home improvement, Peloton bikes and streaming services and are now spending more on experiential items like travel, dining-out and entertainment. This seismic shift in consumer demand is being felt in a lopsided labor market.
Take for example, Walmart – the largest employer in the U.S. – is reportedly cutting about 200 corporate jobs after slashing its profit outlook. However, the company is still hiring in other areas of its business such as in supply chain and health and wellness divisions. Meanwhile, after scaling up dramatically in 2020 and 2021, Robinhood is cutting roughly 23% of jobs.
At the other end of the spectrum, airlines are dealing with a staffing shortage as travel demands are back to 2019 levels. Hotels and restaurants are facing similar staffing issues. In today's jobs report, leisure and hospitality led the way in job gains with 96,000, though the industry is still 1.2 million workers shy of its pre-pandemic level.
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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| A cooldown in the job market is underway: The number of job openings dropped in June while near-record numbers of people continued to quit and get hired into new roles, according to the Labor Department's latest Job Openings and Labor Turnover Summary. The labor market posted 10.7 million new job openings in June, which is down from 11.3 million in May but also much higher than a year ago and a more than 50% increase from before the pandemic. Despite the drop, there are still roughly 1.8 open jobs for every person who is unemployed. |
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| Many workers who changed jobs recently saw raises from their new paychecks outpace inflation by a wide margin — by nearly 10% or more, according to a new study by the Pew Research Center. The typical American who changed employers in the year from April 2021 to March 2022 got a 9.7% bump in their "real" wages over a year earlier, according to Pew, a nonpartisan research organization, which analyzed federal labor data. |
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| Early data suggests more people want to find work in Colorado now that employers are required to list salary ranges on job postings. That's even despite a drop in job openings within the state, according to new research from Recruitonomics, a site that analyzes labor market data. The July analysis looks at the impact of Colorado's Equal Pay for Equal Work act, which went into effect in January 2021 and requires employers to disclose the salary range on all job ads. |
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Delivering Alpha Investor Summit | Crossroads of Risk and Opportunity | September 28 With pervasive economic uncertainty, an outbreak of economic and military warfare, inflation setting records, central banks scrambling to adjust policies, and the long shadow of the pandemic obscuring vision, investors are navigating a market at a crossroads. Is the selloff in equities coming to an end? What's the right path forward for credit investing? Which alternatives provide the best return? Managing risk versus reward, optimizing returns and navigating this new market dynamic amid a challenging environment is the focal point for this year's Delivering Alpha Investor Summit. Learn more and register here. | |
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