Even though Costar sent a solid job report recently, don’t let yourself be fooled by it.
The job market is still struggling to find momentum, with most of the new jobs being population-serving sectors. This means that there has been little improvement in nonfarm payrolls growth as well, mainly because companies are not hiring at faster rates nor producing enough positions for all their applicants who would like to work here.
With an aging population and increased demand for medical services, employment in health care has been on the rise. But most jobs tend to be lower-wage positions which deter workers from returning or push them to choose other higher paying careers, so it is difficult for firms to fill these empty slots during prolonged periods with labor shortages.
The vast majority of hiring in October occurred across many different healthcare industries, including doctors’ offices and walk-in outpatient care centers, which is the main driver behind demand for medical office space. Hospitals, on the other hand, are continuously facing staffing challenges due to concerns that they will be overpowered in the winter with an influx of respiratory viral infections and seasonal flu cases.
Similar issues have happened among education providers. This could be due to a small number of positions in these sectors that offer partially or fully remote work arrangements, which many are accustomed to.
The economy is slowing down, and it’s not clear if this will lead to further hiring in the near future. The number of monthly job gains has been shrinking for over a year now with no sign of change.
The job market has been strong for several other sectors, including professional and technical services, where most new positions were added in tech-related fields like computer engineering or architecture. This is likely due to remote working arrangements allowing firms to decrease office space needs; however these gains may be short lived as earnings outlooks soften recently among some industries.
What concerned us the most was the wage growth reported in October jobs report. Even though the average weekly earning grew by 0.4%, it was no cause for celebration, as it would be in any other point in history. With inflation running at a four-decade high, real wages are actually facing a fall.
The cost of living continues to rise, meaning that workers just can’t keep up. Monthly prices have exceeded wage gains for 16 out the past 22 months, which makes it impossible for them and their families to keep up under immense pressure.
The Federal Reserve is taking notice of job openings and the number has been on a slow decline since reaching 11.7 million in April this year, but it remains elevated with 437K additional positions added last month – a move towards bad news for employers who need more staff now than ever before.
With the holidays approaching, the hospitality industry (hotels and restaurants) are on the lookout for over 200 thousand employees. Healthcare workers also remain in high demand, with warehousing and transportation jobs being right up there on the demand ladder.
The job market may be slowly recovering, but it’s still got a long way to go.
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