Despite headlines about layoffs, there is still a lot of hiring in the US economy.

Layoffs at high-profile companies, especially in the tech industry, have dominated the headlines in the past few months.

But on Friday morning, the Bureau of Labor Statistics reported that 517,000 jobs were added in the US in January, and the unemployment rate fell to 3.4%, the lowest level in five decades. A total of 5.7 million American workers remain unemployed, the lowest since 2000.

As University of Michigan economist Justin Wolfers noted in a tweet following the release of the employment report on Friday morning: “The real America is back to work.”

“The labor market is pretty strong,” Elise Gould, senior economist at the left-wing nonprofit Economic Policy Institute, said in an interview ahead of Friday’s report. “The unemployment rate is low and there are still people who have not returned to the labor market since the pandemic, so we can expect the labor force to grow. But we had an incredible couple of years of recovery.”

Additional data this week showed the strength of the labor market, with more than 11 million jobs remaining in the economy in December and the weekly number of first-time jobless claims falling to 183,000, a nine-month low.

The increase in the number of jobs contradicts the statements of some well-known companies in Silicon Valley. Several tech companies, including Amazon, Google parent Alphabet, Facebook parent Meta, Salesforce, IBM, Intel, Microsoft, Salesforce, Twitter and others, have cut thousands of jobs in recent months.

Layoffs are violent, life-changing events. But there is evidence that many of those who lost their jobs were able to find new ones in a relatively short period of time.

A recent ZipRecruiter survey over the last three months of 2022 found that more than half of newly hired workers found their job within a month of searching, and more than 4 out of 5 found a job within three months.

Even in the hard-hit tech industry, the recovery has been robust: Among workers recently fired from tech jobs, ZipRecruiter found that 37% found a new job within one month, and 79% found a new job within three months.

Where are companies hiring right now?

Among those who are recruiting new employees at the moment:

  • Aircraft and airlines including Alaska Airlines, American Airlines, Boeing, Delta Airlines, Southwest Airlines and United Airlines.
  • Bloomberg LP, which is hiring 1,000 new employees
  • Chipotle announced the recruitment of 15,000 new employees.
  • General Motors told the Detroit Free Press that while this year won’t be a “big” hiring year for the automaker, it continues to look for tech talent, especially among people laid off in Silicon Valley.
  • The US Postal Service employs 2,400 employees in California.

The strength of Friday’s jobs report took most economists by surprise – even those who dismissed the notion that the US was on the verge of a recession.

But at least one group foreshadowed a continuing job boom. Consulting firm Robert Half announced this week that a survey of 2,000 hiring managers found that 58% expect new permanent positions to be added during the first half of the year, up from 46% just six months ago.

In fact, technology (64%) and finance and accounting (62%) managers experienced the highest demand for full-time staff. The survey did show that 72% of managers plan to hire more contract specialists in the first half of 2023, compared to 45% six months ago.

“Recruitment tends to increase at the beginning of the year when budgets have been approved and teams are looking for additional support for initiatives that will drive business growth and customer retention,” said Paul McDonald, senior executive director at Robert Half, in a statement. .

“As vacancies and employee turnover remain high, employers must act aggressively and be prepared to negotiate in order to hire and retain qualified people.”

How did we come to this?

Julia Pollack, chief economist at ZipRecruiter, says the economy is returning to a more “balanced” distribution of job growth after the pandemic caused massive layoffs in the leisure and hospitality industries, but sectors such as warehouse and shipping are seeing a resurgence.

Health care will be at the forefront, she said, as evidenced by the fact that between 70,000 and 80,000 new jobs have been created in the sector every month since last June.

“The economy is returning to normal, with job growth driven not only by the recovery from the pandemic, but by long-term factors such as demographic and technological change, which will also be more sustainable,” Pollack said in a recent interview.

Green jobs like solar and wind energy specialists, spurred in part by President Joe Biden’s multibillion-dollar Inflation Reduction Act, are also likely to see excessive growth.

Sun Belt states like Texas and Florida will see job growth faster than other parts of the country, Pollack said. Georgia, Kentucky, and Michigan are all on their way to building large electric battery factories that will produce components for electric vehicles.

Many economists believe that a “soft landing” scenario for the US economy, in which inflation slows and job losses remain low and corporate earnings remain stable, is highly relevant. One of the key elements of this scenario, at least according to economists, is wage and income growth. Friday’s report showed that the average hourly earnings of low-wage workers rose by just 0.25%, the smallest increase since January 2021.

The slowdown in wage growth is not good news for workers. Indeed, their inflation-adjusted “real” wage growth has been negative for most of the pandemic and post-pandemic period because price increases have been very rapid.

But EPI’s Gould said that as inflation continues to fall, workers are likely to continue to enjoy real income gains.

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