Mark Twain once said, “If you don’t like the weather in New England, just wait a few minutes.” That same logic can be used about today’s job numbers and our rapidly changing economy. It seems that the news changes on a daily basis, as do the mood swings of the stock market, the ‘expert takes,’ even the interpretation of the job’s reports.
The state of today’s job market remains highly unsteady. Just a year ago, unemployment numbers were so low that we were seeing signing bonuses, higher pay, and clients bending over backwards to lure potential employees to fill open positions in all categories of the workforce. That has seen a dramatic change in a very short period of time.
In previous articles, I have touched on the fear that seems to be behind the decision-making we are currently seeing. Clients are opting to ‘hold off for now’ and choosing not to go forward with growth plans until they see more steadiness in the market. This has greatly softened the demand for new hires across the board.
For the first time in many years, candidates are finding themselves competing for jobs, and clients are slower to pull the trigger on hires even while getting better choices on candidates. This is quite a contrast to the recent environment of ‘taking what they can get’ and ‘settling’ for lesser candidates due to lack of choice. This hasn’t seemed to result in softening wages yet, but that doesn’t seem out of the question as we move forward.
As unemployment numbers are rising to the 3.8 to 4% range, that’s still historically very low, but the coming months will be very pivotal in determining the future of the labor market.
If the economy hits the ‘soft landing’ many are talking about, those numbers should hold steady. However, if our economy takes a dive and interest rates climb further, that could have a severe impact on those employment numbers.
As most everybody is aware, our Federal Government has been raising interest rates in an effort to stave off inflation, and by many accounts, it seems to be working, yet many fear they aren’t done, and will boost them again. Each day, when I read and listen to the news, experts exchange opinions. It’s like watching a ping pong match, all sounding so brilliant, until you hear the opposing opinion.
Within one day, the news might switch from positive news about inflation seeming to be contained, then the very next story is about rising oil prices causing gas at the pump to go higher, then unemployment inching up as factory orders decline. It’s a bit of a whirlwind and highly confusing. This turmoil is causing heartburn to consumer confidence and ends up with less spending, more ‘holding off’ on all fronts, further slowing the recovery this economy needs.
With the facts changing so rapidly, it is difficult to forecast the future, but the news isn’t all bad. On a local level, a very major employer that experienced a slowdown earlier this year resulted in a domino effect with many local suppliers to that company softening their sales, but in just the last couple of weeks, this company seems to be poised to fire back up production, creating positivity among local companies that rely on them for their own growth.
It seems that we are at a crossroads of sorts. As simplistic as this sounds, it could really go either way at this point, and we are left with a wait-and-see attitude on many fronts. While 2023 has clearly been an off year for our economy, compared to 2008-2010, this might just be a walk in the park. However, as with Mark Twain’s view on the weather, just wait a few minutes. Let’s hope for clear skies ahead.
