Summer activity is winding down and the routine of life awaits in the fall. However, the job market has been anything but routine even during the dog days summer. It resembles more the ups and downs of the summer’s blockbuster rollercoasters.
Prognosticators say that a recession is inevitable (or may have already happened). But a recession in this case may be a blessing as an overheated job market tries to return to some semblance of normality.
Record Market Activity Easing to Routine?
The Bureau of Labor Statistics JOLTS June data finally shows an easing off of record levels while still remaining elevated.
- Hires eased 2% and are now about 7% above pre-pandemic levels.
- Job openings likewise eased to 10.7 million but are still 50% above pre-pandemic levels.
- Despite sporadic reports of mass reductions, layoffs remain near historic lows and unemployment is now below pre-pandemic levels.
- The escalated quit rates are subsiding somewhat but are still 16% above pre-pandemic levels.
It is hard to be discouraged by what could be a return to normal.
But we are not there yet!
Postings Signal Challenges Remain
Posting volume and posting turnover are Ying and Yang to a proper interpretation of the job market landscape. Unfortunately, in combination July volume and turnover signal a worse job market situation than the JOLTS data does.
Posting Volume Declines Sequentially and Year-over-Year
July job postings declined 13.8% from June and 10.4% from last July. Since the beginning of 2022, job market postings have declined six of seven months from the previous year as shown below.
Open Postings Aging Show Difficulties in Filling Positions
This by itself is not a major cause for concern because last year the market was beyond hot. However, when looking at the decline in postings, we also need to see that the age of these postings is now at a 14-month low as shown in the following graphs.
The combination of the decline in postings and the increase in age continues a four-month trend that shows the ongoing difficulties in filling positions. It is a double whammy to have both declining postings and increasing job age.
Has Remote Hit Its Peak?
Despite what you may read, remote work as a percentage of the overall job market is still fairly low. Many roles and positions HAVE to go into work across wide swaths of our economy. That said, remote work was on the rise until this month. The graph below shows the trends of permanent remote, hybrid remote, and temporary remote positions as identified on Indeed going back to the beginning of 2021.
Posting advertisements identified as remote (blue color above) declined in July and are now comparable to February. Hybrid remote (green color) continue to increase but not as fast as many people thought. Anecdotally many employers are signaling a desire to return to in-person arrangements but are willing to make some accommodations. The flexible work environment is still a very fluid situation.
Pay Transparency is on the Rise
Just 18 months ago only 1 in 3 jobs had an advertised pay rate. Last month, that number increased to over 7 in 10 jobs as shown below.
Pay transparency is a hot topic these days and not received equally. Some cities and regions have mandated pay advertisements and job platforms like Indeed are now requiring it. Employers can generally skirt around it through very wide wage bands based on experience or skills. Consequently, the value of having advertised pay is questionable. See our findings in our June blog.
Employer Sentiment May Be Bottoming Out
We have blogged for many months now on the dissatisfied workforce. Every month we would see ratings and sentiment declines in reviews. A ray of hope appeared in the July numbers. Ratings were flat across different categories as shown below.
Ratings were ostensibly flat across all categories in July. Sentiment measured in net promoter scoring actually ticked up slightly.
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