According to the Labor Department, hiring once again grew much faster than expected.
Employers added 311,000 jobs in February, less than January’s 504,000 jobs but still indicative of a growing economy.
The numbers surpassed expectations of economists, who estimated job gains of 225,000.
The sectors most impacted by the pandemic were among those driving February's job growth.
Leisure and hospitality, retail, and healthcare added workers, while transportation and warehousing, finance, manufacturing, and the tech-heavy information sector lost workers.
"Large parts of the economy—including restaurants, hospitals and nursing homes—are driving the growth. Those service providers were hit hardest by social-distancing measures at the onset of the pandemic. Now, nearly three years later, they are hiring at a rapid clip as they find it easier to recruit and fill openings."
Average hourly wages increased by 4.6% over a year earlier, lower than the pace of a year ago but still higher than the pre-pandemic pace.
Unemployment increased to 3.6%.
Read more via Wall Street Journal
The latest Job Openings and Labor Turnover Survey (JOLTS) report is out. In January, employers advertised fewer job openings and the number of people quitting fell, while layoffs increased.
In January, employers posted 10.8 million job openings, down from an upwardly revised 11.2 million in December.
The latest figure is below the record 11.9 million advertised in March 2022 but still well above the pre-pandemic level of about 7 million.
The 10.8 million job vacancies amount to 1.9 available jobs for each unemployed person, "close to a record dating back two decades.”
Economists say the latest job openings data indicates the economy is “heading in the right direction,” but that the decline in January was "far too modest to convince (the Fed) that labor market conditions are cooling enough to bring down inflation."
Sectors that saw openings decrease included construction (-240,000), leisure and hospitality (-200,000), financial activities (-151,000), and retail (-94,000).
Openings increased in professional and business services (+95,000) and transportation, warehousing and utilities (+94,000).
Layoffs increased by 16% (241,000) to a total of 1.7 million, a historically average figure, but the most in more than two years.
The number of quits decreased to 3.9 million, from 4.1 million in December.
According to payroll firm ADP, US employers “stepped up their pace of hiring in February.” The US economy added 242,000 private sector jobs in February, “double the revised 119,000 figure in January and significantly more than analysts expected.” Pay growth in February “slowed to 7.2% compared with a year ago” and for workers who changed jobs, "wage growth eased as well to 14.3%."
“We're seeing robust hiring, which is good for the economy and workers, but pay growth is still quite elevated. The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near-term."
Read more via Barron's
The ISM's service-sector index fell to a “still-strong” 55.1% in February. Any reading above 50% is considered “positive.” The index is considered a “barometer of business conditions at service-style companies such as hotels and hospitals.” The most recent reading indicates the “US economy is still in expansion mode.” Read more via Marketwatch
According to a new survey by the Recruitment and Employment Confederation and KPMG, businesses are “hesitant to take on new staff in the UK given fears that the country could eventually tip into recession.”
The Recruitment and Employment Confederation/KPMG monthly permanent placements index fell to 46.3 in February, down from 46.8 in January, with employers more likely to use temporary workers to fill roles.
This is the fifth month in a row that permanent job placements have fallen.
Recruitment activity “remained dampened by lingering economic uncertainty and subsequent hesitancy around hiring.”
“Employers keep playing the short game by focusing on temporary hires.”
Read more via Yahoo News
According to new research, the pandemic has driven poorer and less-educated employees into better jobs, despite economists' fears that it would do the opposite.
Economists worried about low-wage workers experiencing a “permanent setback” in terms of earnings as a result of the pandemic.
But new research shows wage growth among lower-paid and less-educated workers is outpacing wage growth among the better-paid and more highly educated.
In a paper published by the National Bureau of Economic Research, research shows competition for low-wage workers as "more intense than before the pandemic,” and it “could lead to further reductions in income inequality, raise labor costs at firms that employ low-wage workers, and reshape the US business landscape.”
For workers at the "upper limit of the bottom 10% by income,” typical weekly earnings in the fourth quarter were 22% higher than in the fourth quarter of 2019, according to Labor Department data. Over the same period, workers with a high school diploma saw their wages increase 17%. Workers with a bachelor's degree saw an increase of only 12%.
Young workers who are switching jobs most frequently are faring the best, compared to “older, less-educated workers who stayed in the same job through the pandemic.”
The US economy is proving resilient, with “steady consumer spending and stabilizing manufacturing activity,” according to the contacts surveyed in the latest Federal Reserve Beige Book. The report noted that “labor market conditions remained solid.”
Labor Market Overall:
Employment “continued to increase at a modest to moderate pace” across the country, “despite hiring freezes by some firms and scattered reports of layoffs.”
Employers are finding it somewhat easier to find workers, although “finding workers with desired skills or experience remained challenging.”
Childcare availability, or lack thereof, “continued to impede labor force participation” across several regions.
Wage pressures have “eased somewhat,” and wage increases are “expected to moderate further in the coming year.”
Highlights by District
Boston: Headcounts were “roughly flat,” with retailers reporting a “modest decline.” Wage growth was “steady at an above-average pace.” High childcare costs reportedly deterred some candidates from training programs. Some employers reported being hesitant to “make direct hires given fears of a recession, but hiring from temporary roles became more common.”
New York: Labor market conditions remain “strong,” with job gains in the information and wholesale trade sectors. Manufacturers reported declining employment “for the first time since early in the pandemic.” Employers found it easier to attract and retain workers, though “finding workers with desired skills or experience remains a significant challenge.”
Philadelphia: Employment growth continued at a “modest pace,” with 20% of firms reporting increased employment and 10% reporting decreased employment. Contacts reported seeing “more applicants, lower turnover, and less wage pressure.” Contacts also “pointed to a lack of childcare, baby boomer retirements, disconnected youth, the national immigration policy, and lingering effects of the pandemic as critical underlying factors” of a still-tight labor market.
Cleveland: Employment increased slightly, but a "larger share of contacts indicated that they had held staffing steady.” Contacts' “hiring expectations suggest employment growth will slow further in coming weeks," and “several contacts suggested that they were less likely to lay off workers in the event of an economic downturn because they were focused on retaining enough staff to meet longer term production goals.” Wage pressures continued to ease.
Richmond: Employment “grew modestly in recent weeks,” though firms “continued to report significant issues with finding qualified workers.” Wage growth is beginning to slow, but wages remain “above what employers were expecting to offer.”
Atlanta: Labor market pressures continued to ease, but contacts “still described conditions as tight, especially among front-line, skilled trades, and IT positions.” The majority of firms in the district continued to hire workers, and layoffs were noted by only a few contacts. Firms are making investments in training to upskill workers in an effort to combat labor shortages.
Chicago: Employment “increased moderately in January and early February, and contacts expected a somewhat slower increase in employment over the next 12 months.” Contacts continued to report “difficulty finding workers, though the number of applicants for open positions increased.” Wages continued to increase, with contacts also noting higher health insurance costs.
St. Louis: Employment remained unchanged from the prior report with “contacts reporting tight labor markets but varying turnover rates.” Contacts said retaining workers has become easier and reported only minimal wage increases.
Minneapolis: Employment “grew moderately since the last report,” with a large majority of firms “hiring in some capacity.” Less than 30% of employers said they weren't hiring, and only 5% reported cutting workers. Larger firms reported “notably better success at adding workers.” Wage pressures were “flat but remained high.”
Kansas City: Contacts reported moderately increased employment, “though the pace of hiring has significantly slowed from its recent elevated level.” Employers report continued issues finding qualified workers to fill vacancies, including entry-level positions. Wage growth continued at moderate levels.
Dallas: Employment “increased moderately during the reporting period.” In the service and energy sectors, the pace of hiring slowed. In the manufacturing sector, employment growth has “stalled.” Some firms continue to find it difficult to recruit for open roles, but “many others reported an improvement in both the quality and quantity of applicants.”
San Francisco: “Hiring activity grew modestly during the reporting period,” with the labor supply showing signs of improvement “across most sectors.” Competition for talent remained “tight across skill levels, including for positions in food services, hospitality, construction, health care, and manufacturing.” Workers “continued to demand flexible work arrangements where applicable but were faced with firms' mixed appetites for remote work.”
Read more via Federal Reserve
Germany's labor market is short on workers and “under severe pressure” as a result. But the more than one million Ukrainian refugees who have entered Germany since the start of the conflict aren't likely to provide a long-term solution.
Over one million Ukrainian refugees have been recorded as arriving in Germany since the start of the war. Germany has taken in more Ukrainian refugees than any country except Poland.
In the fourth quarter of 2022, Germany's labor market hit a new record high, with 45.9 million people employed.
Despite this, over half of German employers still say they are “struggling to find skilled workers to fill vacancies.”
Many of the Ukrainian refugees are highly educated, and can be relatively easily integrated into Germany's workforce, at least compared with other refugee populations. But, barriers remain.
Language is one issue. Over half of Ukrainian refugees in the country say they are learning the language, but becoming proficient enough in German “to fully participate in a work environment is no quick process.”
72% of adult Ukrainian refugees in Germany have a university degree but data “suggests a large percentage of Ukrainians will only accept work that matches their education level.”
Perhaps the larger problem is that “many Ukrainians want to go home as soon as they can, making their participation in Germany’s labor market limited and short term.”
"It would be rather short-sighted if we thought that these Ukrainians, they can now alleviate our shortage of skilled labor that we have in Germany."
Read more via CNBC, OECD survey, Federal Office for Migration and Refugees
France: Unions are continuing action in protest of French President Emmanuel Macron's pension reform plans. Last week, “most trains came to a halt, fuel deliveries were disrupted and schools shut in a sixth day of nationwide strikes.” Unions have promised “rolling strikes, which could go on for days,” across “more than 300 towns and cities.” (CBC)
Netherlands: 46% of Dutch workers are “latent job seekers,” according to a new survey. These workers are “not actively looking around for jobs, but are open to an attractive offer.” According to the same survey, 34% of workers say they “have been hesitating lately to switch to another employer while 10% of workers said they are already actively looking for another job.” (SIA)