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The new job numbers: Why it’s good news for workers

By Lee Cleveland - April 9, 2023

Last Friday, the Bureau of Labor Statistics reported that the economy had obtained 236,000 new jobs in March which is lower than in prior months but still a good indication of growth in the labor market.

Even with large-scale layoffs in certain sectors, the general labor market still appears to be stable. This is evident from the decrease in the unemployment rate to just 3.5 percent, indicating a healthy economy.

The jobs report sends a couple of different messages.

Job seekers in various industries have a good reason to be optimistic. There are plenty of job openings and they should expect to receive higher wages than what was typically offered in the past. Hospitality and healthcare companies continue to experience a high level of demand, making it an opportune time for workers in these sectors to take charge and leverage their position.

“Based on the things we would look at to say whether people could find good jobs with good wages on good terms, this is still a very strong labor market,” Mike Konczal, a director of macroeconomic analysis at the Roosevelt Institute, told Vox.

Experts have noted that the current jobs report does not indicate any signs of an economic recession in the near future. This shows a steady improvement in the health of the economy as a whole.

“There are just no signs of recession to me in this report. It’s very strong,” Heidi Shierholz, the president of the Economic Policy Institute, informed Vox.

The recent jobs report indicated some signs of cooling off in the economy, yet simultaneously showed that vital figures such as unemployment are still at a healthy level.

“We are seeing clear slowing from the absolutely mind-boggling fast job growth that we had been seeing a year ago,” says Shierholz. “But it is still very strong. It is cooling but strong.”

A dip in jobs added suggests some slowing

Recent figures, especially the job market report, point to a slight reduction in the need for labor. This follows a phase of intense recruitment activity though.

Despite a rise of 236,000 jobs in March, last month’s increase fell drastically in comparison to February’s 310,000 jobs increase and January’s 517,000 job advance. But in spite of the decrease in the labor market growth rate compared to previous months, the current number still looks positive. This is likely due to the Fed’s decision to adjust interest rates in a way that limits consumer spending and business investments.

Recent data from the Labor Department reveals that job listings have decreased for the first time in two years and were below 10 million in February. With this being said, there still are more jobs available than unemployed individuals.  

According to February statistics, the job openings in the month were 9.9 million, a slight drop from 10.6 million in January. Nevertheless, there are still 1.7 jobs per unemployed worker available in the market.

The current numbers of jobs added and open positions have become slightly smaller compared to the peak, however, they are still quite high. This shows that the market for employment is still strong.

While unemployment insurance claims have risen recently, it’s still part of a normal range for a healthy economy. This is an additional sign that the economic growth rate is slowing down.

The cooling in the labor market has long been a goal of the Fed, which has sought to slow the economy and reduce demand for labor via its hikes in interest rates.

The Federal Reserve has been working to control the temperature of the employment market by increasing interest rates. This, in turn, would reduce the demand for labor and slow down the economy’s growth.

To maintain price stability, the government is focusing on curbing inflation. Their main concern is that more competition for employees leads to an increase in wages and product prices.

Analysis conducted by Shierholz utilizing BLS data on salary growth implies that the US can experience low levels of inflation and joblessness at the same time. This data makes it clear that concerns about their economic future are unfounded.

The March jobs report revealed that wage growth was 4.2% year-over-year, a slight decrease from the previous month’s 4.6%. This data muddles the traditional economic narratives we are used to.

“Despite a strong job market, we’ve seen inflation come down. So it’s hard to square that with a strong job market causing inflation,” Chris Becker, the senior economist at the Groundwork Collaborative, told Vox.

In spite of industry-specific fluctuations, the job market remains strong for workers

In general, economists note that the labor market remains solid for workers, though that has varied a bit based on the industry.

Despite downsizing in some specific areas like tech and finance, the hospitality industry has seen an upsurge in hiring people who were previously laid off due to the pandemic.

A recent review of job figures shows that leisure and hospitality, health care, and government sectors have seen a surge in employment numbers while construction, manufacturing, and retail have experienced some reductions.

This report also indicates that the joblessness rate for African-American individuals is the most minimal it has ever been, in spite of still being higher than that of Caucasian workers.

Also, the labor force participation rate saw a slight increase in March from 62.5 percent to 62.6 percent, indicating that new recruits are entering the workforce.

The number of jobs available can have a huge impact on the economy. More people will gain employment, leading to more money circulating in the economy which can result in an increase in consumer spending and promote economic prosperity.

“Not only is it not dropping, labor force participation is going up. It’s still on the upswing,” says Shierholz.