April 2023 Career News

Welcome to the Career Economy!

The heat is…off?

After substantial job growth in January (500k+ jobs) and higher-than-anticipated job growth in February, we’re finally seeing a slight cooldown in the labor market, as there’s been a gradual deceleration in new jobs since the start of the year. 

That said, we saw a pretty solid performance in March with the creation of 236,000. I took a look back at 2019 job statistics to get a feel for how this market compares to the true “before days.”

It turns out, we’re faring pretty well right now because job growth averaged a little less than 200,000 new payrolls a month for most of 2019. #perspective

Here are a few things to consider as I dig into “the numbers” a little more: 

➡️ You’ve heard me say it before, and I’ll say it again – we need the labor market to cool off if we’re going to get a full check on inflation. I would really like to not pay $4 for a block of cream cheese the next time I decide to make a carrot cake. 

➡️ The U.S. has created over 12 million jobs in the last few years of recovery, so at some point, we had to see a cool down because there are only SO MANY jobs that can be created when unemployment is still sitting at 3.5%.

➡️ There are currently roughly two job openings for every job seeker (statistica.com), but if you talk to any professional on the market, you’ll quickly realize job searching right now is not like shooting fish in a barrel.  

➡️ There’s a disparity between the types of jobs that are open and the candidates seeking them, which means the “white collar” market will continue to see big applicant pools and extended job searches for the foreseeable future.

Last month’s update came out on the heels of the SVB bank failure, so we have yet to see how that will impact overall job creation or hiring. Banks have tightened their belts on commercial lending, so at some point, that could catch up with payrolls.

I decided to dig a little deeper into the numbers this month.

At some point in the past few weeks, we officially crossed the threshold of 2023 tech layoffs outpacing the entirety of 2022. I’m not sure that’s a milestone we wanted to hit, but it got me curious as to what layoff trends are looking like right now. 

I asked ChatGPT to tell me how the Bureau of Labor and Statistics calculates their monthly numbers (more specifically, I asked them to explain it to me as if I were a fifth grader. 🙈 Whether it hit the level of comprehension mark remains to be seen; this is complicated)! 

Here’s what it said: 

[BLS] surveys businesses of all sizes and asks them how many people they employ and if they have hired or fired any workers during the month.

Once they have collected all of this data, they use a formula to estimate the total number of people who are employed or looking for work in the entire country.

This information is then used to create the monthly job report, which includes the unemployment rate and other important statistics about the job market in the United States.

This is one of the reasons they often adjust the numbers in the month following the release of the report. It’s basically one big giant projection, but since we’re comparing it to previous projections created the same way, I suppose it’s trustworthy and representative. 

Oh, I haven’t stopped yet…I’m really down a rabbit hole now! 

The Bureau of Labor and Statistics also releases a second report on Job Openings and Labor Turnover, where it summarizes separations of all types to help shed some additional light on the net numbers provided in the jobs report

I found this report really insightful because it provides a frame of reference for what’s happening at a “gross” level compared to the “net” projections in the jobs report

Here’s how it shakes out:

There were 9.9 million job openings listed in March, which is down just slightly (6%) from February. I love having an economy of scale on the actual number of jobs available in the market. Fascinating! 

Hiring clocked in at 6.2 million, which counterbalanced the 5.8 million separations (layoffs, quits, fires, etc.), we saw last month. That adds some levity to the situation, eh? 

Fortunately, the total number of separations was pretty flat compared to February, and 4 million of those 5.8 million separations were quits! Four million people LEFT their jobs in March. Whew! Anyway, layoffs decreased to 1.5 million in March, which gives me some hope that the dust is settling in the tech sector.🤞 

So, in summary, if you do some rough – emphasis on ROUGH – math (or as Floyd, my high-school-math-teacher-dad called it, magic math) 6.2 – 5.8 with some rounding and adjustments could land you in the net of 200 – 300k jobs. Neat! 

And now the advice portion of the Career Economy

What does this mean for you? 

We’re in the middle of a shift, and no one likes to be in transition or in limbo, which is exactly what happens when markets are actively changing.

I suspect we’re nearing the top of the bell curve of change, and things will begin to normalize within the next quarter, at which point, we’ll have a better understanding of what the longer-term hiring landscape will look like and how you can successfully navigate it. 

For now, my advice is: be strategic, network your butt off, and ditch the singular “I can apply online and get a callback” approach because that is a fast track to frustration in this kind of market. 

Or, you could just call me. Maybe

Your Friend and Coach, 

Angie

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