America\u2019s job market increasingly appears to be splitting into two tracks, economists say, alongside a steady demand for skilled workers and a flagging interest in hiring more \u2018knowledge-based\u2019 professionals.<\/p>\n
The evidence can be found in the data, which shows a higher unemployment rate for professional and business services workers, and a lower one for people who work in manufacturing.<\/p>\n
\u2018It\u2019s a buyer\u2019s market for brain and a seller\u2019s market for brawn,\u2019 said Aaron\u00a0Terrazas, chief\u00a0economist\u00a0at\u00a0the jobs and workplace search site Glassdoor.<\/p>\n
On Friday, the Bureau of Labor Statistics reported the latest monthly payroll data for the U.S. economy. Total employment rose by 175,000 in April. The unemployment rate rose slightly to 3.9% from 3.8% in March.<\/p>\n
That came in below estimates of 240,000 jobs for April.<\/p>\n
The softness in the jobs report was greeted with some positive reactions. Stock futures jumped after the news. Concerns about the U.S. economy have been focused on overheating \u2014 whether inflation will continue to rise and force the Federal Reserve to keep interest rates higher in an effort to <\/strong>slow the economy and bring rising prices under control.<\/p>\n Jason Furman, who served as President Barack Obama\u2019s top economic advisor, said on CNBC\u2019s \u2018Squawk Box\u2019 that it was a \u2018goldilocks\u2019 report, showing an economy that could be headed to the soft landing of reasonable inflation and low unemployment.<\/p>\n \u201cThe bottom line is this report is quite reassuring,\u2019 said Furman, who now teaches at Harvard.<\/p>\n It\u2019s not that America is only \u2014 or even mostly \u2014 producing low-wage jobs. The health care industry continues to lead the employment boom, with an approximately 4.5% gain in payrolls over the past year, equating to some 750,000 new jobs. Other industries seeing strong growth include government jobs, certain sectors of social work, travel, tourism and the arts \u2014\u00a0alongside some manufacturing sectors.<\/p>\n But the overall labor market remains at something of a standstill, as seen in a report earlier this week showing the hiring rate continuing to drift sideways. At the same time, the rate of workers quitting or being laid off is also not showing much change. Economists led by Guy Berger at The Burning Glass Institute research group call it the \u2018great stay.\u2019 <\/p>\n \u2018It\u2019s a good time to have a job, but a not-so-good time to be actively looking for one,\u2019 he wrote in his Substack newsletter Wednesday. <\/p>\n Many American consumers have also begun reporting signs of a deteriorating job situation. In its latest report on consumer confidence, the Conference Board business group said respondents to its monthly survey reported feeling less positive about the current labor market and more concerned about future business conditions, job availability and income.<\/p>\n That echoed findings of the New York Federal Reserve\u2019s monthly survey of consumer expectations, which reported more survey respondents feeling pessimistic about losing their job or finding a new job. Respondents rated the average probability of losing their job in the next 12 months at almost 1 in 6 \u2014 above pre-pandemic levels and the highest reading since September 2020.<\/p>\n \u2018On the margin, businesses are not as eager to add staff,\u2019 said Sarah House, managing director and senior economist at Wells Fargo.<\/p>\n But why has payroll data remained strong? One reason is increased supply, thanks to rising participation rates in the workforce, as well as booming immigration.<\/p>\n \u2018There is increased labor \u2018supply\u2019 for businesses that do want to hire or add staff,\u2019 House said.<\/p>\n Yet, those trends are likely to diminish too, if they haven\u2019t already, she said.<\/p>\n One sign that the job market remains strong is that the number of individuals collecting unemployment is still very low.<\/p>\n \u2018We\u2019re seeing a gradual and orderly slowing\u2019 in workers quitting and firms with job openings, said Joe Brusuelas, principal and chief economist for RSM US LLP. That is consistent with private sector firms \u2018carefully managing their labor force.\u2019<\/p>\n On Wednesday, Federal Reserve Chair Jerome Powell said the central bank does not intend to change its key interest rate anytime soon even as its fight against accelerating price increases has stalled \u2014\u00a0and despite the apparent softening of the labor market.<\/p>\n He said the central bank had \u2018the luxury of strong growth and a strong labor market\u2019 that will allow it to maintain interest rates until inflation comes down further \u2014 and ruled out any implication that there might be \u2018stagflation\u2019 in the economy.<\/p>\n But he invoked the prospect of a rate cut should the labor market \u2018unexpectedly\u2019 weaken.<\/p>\n As inflation continues to moderate, Powell said, \u2018We\u2019re now focusing on the other goal,\u2019 referring to the Fed\u2019s dual mandate of balancing price growth with jobs.<\/p>\n \u2018The employment goal now comes back into focus. So we are focusing on it,\u201d he said.<\/p>\n Some economists saw Friday\u2019s jobs report as sign that Powell\u2019s plans are coming to fruition.<\/p>\n \u2018These are the #jobs numbers that Jay Powell was hoping for,\u2019 David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, posted on X.<\/p>\n<\/p>\n America\u2019s job market increasingly appears to be splitting into two tracks, economists say, alongside a steady demand for skilled workers and a flagging interest in hiring more \u2018knowledge-based\u2019 professionals. The evidence can be found in the data, which shows a higher unemployment rate for professional and business services workers, and a lower one for people […]<\/p>\n","protected":false},"author":0,"featured_media":3946,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-3945","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3945","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=3945"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3945\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/3946"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=3945"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=3945"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=3945"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}