- September's robust job growth signaled what looks like a booming labor market.
- But job seekers are having a rough time finding a new job amid labor hoarding.
- Workers are increasingly unlikely to quit their jobs as opportunities dry up.
If you like your job, congrats: You're winning the labor market.
In general, the job market is booming. The unemployment rate unexpectedly declined in September, the economy added many more jobs than anticipated, and job growth occurred in many industries.
But while the new jobs report suggests a broadly strong economy, it doesn't mean "every worker is necessarily doing perfect," Cory Stahle, an economist at the Indeed Hiring Lab, told Business Insider. Job seekers may have a harder time finding a new gig than a couple of years ago.
Employers and employees alike are finding themselves locked in a stalemate. Companies, scarred by the whiplash of shedding workforces in 2020 and then scrambling to rebuild, don't want to let go of their workers. But they don't want to hire too much yet either, as they wait to see how the future investment situation shakes out.
At the same time, workers who might want out are golden handcuffed; they're not quitting because the opportunities to move up and out are becoming scarcer. And for anyone looking on from the periphery, it's bad news all around.
There's some tension hiding in the data
On its face, the labor market is looking rosy. Job growth continues to be strong, and the unemployment rate continues to be very low. The layoff rate also continues to hover below its pre-pandemic average. That's all good news.
There's a big but, though. If you're out of a job, it may take a while to find a new one: In September, around 1.6 million people were long-term unemployed, meaning unemployed for at least 27 weeks. That's the highest figure since early 2022.
"If you don't have a job, it really has become harder to make that match, and I think that's because businesses are pulling back, and they're just waiting to see what happens with these rate cuts and with the economy," said Liz Wilke, a principal economist at Gusto, a company focused on HR solutions for small and medium businesses.
Workers are more inclined to hold on to their existing jobs, typically a sign that they're not confident about being able to quickly make a switch. The quits rate had generally been slowing and hit a four-year low of 1.9% in August. Excluding the chaotic months of the early pandemic, it's the lowest share of Americans quitting their jobs since July 2015.
Those quit-shy workers may be right that there are fewer opportunities out there. Job openings ticked up in August but have been broadly declining since 2022, adding to the tough labor market picture for job seekers.
It took over 1,000 job applications and around four months for one job seeker to get a role she would want to take — even though she started job searching just a half hour after being laid off. Another laid-off person who estimated to be up to almost 2,200 applications at the time of reporting said that his "plan at this point is to give up on the search."
"Dissatisfied workers looking for a different job may need to hang tight with their current employer longer than they'd like," Elizabeth Renter, a senior economist at NerdWallet, said in written commentary. "There are just fewer opportunities to go around, so those that are available garner stiff competition."
Job searching might also be hard for people joining the labor force for the first time. Matt Colyar, an economist at Moody's Analytics, said that the job market is tough for new college grads as companies pull back on hiring.
A slowly cooling labor market
Claudia Sahm, the chief economist at New Century Advisors and a former Fed economist, told BI there is some "labor hoarding" going on after employers experienced labor shortages in the wake of the pandemic. She said employers don't want to go through that this time and are "being particularly careful about not laying off workers." Companies might be avoiding layoffs, but that means they might also be shy about hiring.
Even though the labor market has cooled, it's largely done so without mass layoffs or a full-blown recession. While there's some friction right now, the worst has been averted.
"The predictions in 2021 were the economy is too hot, job growth was too strong and it would come crashing down," Julie Su, the acting secretary of labor, told BI. "We have never seen that crash. It has been strong, steady, stable growth month after month after month."
Job seekers might just need to bide their time.
Wilke, the economist at Gusto, said if interest-rate cuts are "timed right," there could be "a resurgence in hiring and labor market dynamism" in 2025. It's likely more rate cuts will happen before 2024 is over — and that could mean a bit more hiring.
Are you in a job you want to leave or unable to find a job? Reach out to these reporters at [email protected] and [email protected] to share what your job situation is like.