The Post-Pandemic Labor Market Rollercoaster is Over
The Post-Pandemic Labor Market Rollercoaster is Over
After the labor market rollercoaster of 2020 to 2022, the labor market has eased back into its usual rhythms—so much so that the JOLTS report is no longer a headline-grabber and has once again become a snooze fest.
Before the pandemic, the report seldom made headlines. The most common phrases found in its pages were “changed little” (which appears 11 times in this report). It took a particularly skillful journalist to turn it into news. After its moment in the sun, the BLS’s JOLTS report is fading into the background again.
Job openings, quits, and layoffs and discharges all remained roughly the same in September as in August. No industries or states broke records, except for the public sector with record-low layoffs and firings. The labor market remained resilient, stable, and uneventful.
To the extent that the report can be said to have highlights, here are a few candidates:
The smallest businesses now account for more than one in five job openings. 10 years ago, in 2013, the smallest businesses with between one and nine employees accounted for a mere 11% of nationwide job openings. In September 2023, the accounted for a record-setting 21%. The rise of remote work and enterprise-quality small business software services has made it cheaper and easier to start a small business, and scale it quickly. That is generating many job opportunities at small companies that punch above their weight.
Job openings remain hugely elevated. Compared to their February 2020 level, job openings are 59% higher in manufacturing, 54% higher in healthcare and social assistance, and 52% higher in arts and entertainment. These high levels of openings would predict much higher rates of hiring and job growth than we’re seeing, and labor shortages are no longer the prime culprit, given the recent increases in labor force participation rates. Rather, it appears that high interest rates and uncertainty about the future outlook are causing businesses to fill vacancies more slowly.
The labor market has become less dynamic. Job growth has been rapid in recent months, but the increases in headcount have owed more to slower rates of churn than to rapid hiring. The number of hires in September was 2% lower than in February of 2020, and the number of layoffs was 23% lower. Companies are still reluctant to let go of workers, worried that it will be costly to replace them.
Layoffs and discharges hit a record low in the public sector in September. The public sector job recovery has lagged behind that of the private sector, largely because the private sector was quicker to raise wages. The public sector is now making a more concerted effort to address staffing shortages, both by enticing new hires and by retaining existing employees more effectively.
Take a tour of the report through ZipRecruiter visualizations HERE.
