We keep waiting for an alarming labor market report from the Bureau of Labor Statistics, or at least an underwhelming one. We still haven’t received it. Yes, there are a lot of people facing transitions in their careers right now, including layoffs, but the overall labor market remains in a very favorable state.
April’s 253,000 job gains exceeded economists’ expectations, bringing the year-to-date total to more than 1.1 million jobs added. One downside in the latest report was that fewer jobs were added in March than originally reported. The total for March ended up being 165,000 jobs added, rather than the initial estimate of 236,000.
The takeaway is that the majority of businesses continue to move forward, adding new roles even in the face of pessimistic headlines.
Of course, not everyone feels like the job market is still strong, especially if they have been impacted by a layoff and it is taking some time to find the next role. For some people, today’s job market feels much more dire than what I typically write about, and I understand that. I often get thank-you notes for the optimism I share, but all I’m doing is providing historical context around recent data points.
When you do that, it’s easy to see that today’s job market is still not showing the type of disruption we experienced during the Great Recession, which was the last economic downturn not related to the pandemic. I’ll dig into a few numbers to highlight the differences.
One of the main numbers to watch right now is the weekly release of unemployment insurance claims by the Department of Labor. They give a good sense of layoff impacts. (You can find this information each Thursday morning on dol.gov if you’d like to follow it yourself.)
Within the Labor Department’s report are two numbers to watch: initial claims and continued claims.
Initial unemployment insurance claims are an indicator of how many people have recently lost their jobs. Looking at a four-week moving average can help smooth out swings in individual weekly totals. The latest four-week average was just over 244,000 initial weekly claims. Initial claims have hovered around that range since about mid-March.
The same metric was approximately 215,000 in both 2022 and the 12 months prior to the pandemic.
What does that mean?
The report suggests that more people are being laid off at this point, but it appears to be steady and not currently increasing at a pace that would suggest job gains are about to plummet.
So again, we aren’t seeing underlying numbers similar to when mass layoffs occurred during the Great Recession. The average for initial unemployment insurance claims in 2008–2009 was 496,000 per week, and the labor force was much smaller back then. The unraveling that occurred then is not occurring now. At least not yet.
The other metric to look at in the report is continued unemployment insurance claims. After people’s initial filing for unemployment, they move to the continued claims category if they remain unemployed and keep collecting payments.
Continued unemployment insurance claims give an idea of whether people are eventually finding work after being laid off. If the number keeps growing, then there is likely a combination of more people being laid off and it taking longer for them to find a new job.
The most recent four-week average for continued unemployment insurance claims was just over 1.8 million people. Similar to initial claims, the figure has been somewhat steady since mid-to-late March.
One could surmise that the length of time it is taking people to find a new job is stabilizing rather than growing. While the number of continued claims has increased by about 300,000 from last year, it is at practically the same level as right before the pandemic. That may not feel the same as right before the pandemic, but the data suggests otherwise.
In 2008-2009, continued unemployment claims averaged almost 4.6 million. We are nowhere close to that level, but if you just read some of the headlines, you’d think the situation was the same.
The key difference is there are 9.6 million open jobs today and businesses are still hiring. During the depths of the Great Recession, job openings fell to 2.2 million. That’s why there were more people unemployed for longer compared to today’s labor market.
Let’s hope job openings remain elevated, but we do expect overall job gains to slow and trend closer to 100,000 per month at some point soon.
As a final note, it’s important to clear up one other piece of misinformation that’s out there — which is that the only jobs being created are in the service industry or hospitality, and there’s no hiring in industries where layoffs are more prominent.
Again, the data suggests otherwise.
All major industries added jobs in April. The professional, scientific and technical services, and financial activities industries added a combined 68,000 jobs, and they’ve been some of the main targets for layoffs. Healthcare added 40,000 jobs, and government added 23,000.
At LaborIQ, we see all types of jobs being searched for backfilling existing roles or hiring new ones. Looking at usage stats from our product, customers are seeking compensation recommendations for accounting, operations, marketing, and HR jobs. Technology is also on the list, but we have seen a decline in searches for that group, while the others mentioned have been steady.
