The Labor Department is set to release its April jobs report on Friday, which it said showed a continued slowdown in hiring as pandemic-era growth sectors returned to normal activity levels and rising interest rates impacted business expansion. expected.
Forecasters estimate the economy added 180,000 jobs last month. This would be a significant drop from the monthly average of 345,000 jobs in the first quarter of 2023.
“We expect the negative impact of interest rates on the labor market to become more severe in the second half of the year,” said Frank Steamers, senior economist at The Conference Board. “At the beginning of the year, employment growth was much better than expected.”
Job creation has repeatedly outperformed projections over the past year, even as the Federal Reserve (Fed) tries to keep prices down by increasing borrowing costs.However, job postings retreat rapidly, and the rate at which workers quit their jobs is almost back to 2019 levels. At the same time, more Americans are returning to the workforce, immigrants are recovering, and employers are finding it easier to hire.
In March, interest rate-sensitive industries (such as construction and manufacturing) began losing jobs as they dealt with the stack of orders during the pandemic. Outplacement firm Challenger, Gray & Christmas reported on Thursday: Employers have announced job cuts totaling about 337,000 jobs. This year we are concentrating on the retail and technology industries.
Once a broader recession sets in, job cuts will likely be different than during previous recessions.
Mr. Steamers Recently created an index Estimate the risk of unemployment in various industries. Labor demand in sectors such as leisure and hospitality, where staffing has not yet returned to pre-pandemic levels, is so acute that even a decline in consumer spending will not lead to many job cuts.
But industries like the information sector, which has rapidly adopted to serve an increasingly technology-dependent population during pandemic lockdowns and the shift to remote work in 2021 and 2022, will see even greater growth. significant reductions may be made.
