Active Job Listings down 7% MoM and 12% since August, indicating a distinct downward trend in the previous 3 months. We expect the decline to continue in December.
Decreased Hiring Velocity indicates caution and choosiness among employers across sectors. Labor demand definitively tapering off.
Every major industry but one experienced decline in job listings; the dropoff in labor is systemic across the economy.
LinkUp forecasts a monthly NFP add of 50K jobs in November, well below the consensus estimate of 170K.
Mixed signals continue to cloud the macro outlook as the labor market cools off but GDP growth surprises to the upside, core inflation keeps falling, and jobless claims remain flat.
LinkUp job data for November indicates we’ve entered a new phase of the post Fed-hike economy: labor demand is definitively down after three months of decline.
After the Fed initially raised interest rates in March 2022 to put the squeeze on inflation, the unprecedented pent-up labor demand post-COVID began to cool. But not much: during the nine months between March ’22 and January ’23, demand tapered surprisingly slowly and leveled off to a robust plateau by Q1 of this year. Unemployment held low and steady, wages stayed high while wage inflation dropped, and a stunning equilibrium of the labor market leveled us into a soft landing, in spite of the widely negative feeling of consumers grappling with inflation on the ground.
Now, as we evaluate a third consecutive month of decline in labor demand, that soft landing is looking pretty rough around the edges. At the end of November, the NYT podcast “The Daily” recorded an episode titled "The Bad Vibes Around a Good Economy." While many indicators continue to signal economic strength–Q3 GDP was revised to an impressive 5.2%; core inflation dropped to 3% in October; and joblessness claims remained flat–a continued slackening of labor demand through the end of the year would bring the prospect of recession closer. In other words, the numbers may start to match the “vibes.”
At LinkUp, we’re approaching the data with a cautious concern. We are projecting an NFP job add of 50K for November, considerably below the consensus estimate of 170K. We expect December may clock in with the first negative job report in 35 months. And yet, by many measures the American economy is doing better than it has in years.
As always, we’ll continue to provide timely, actionable, and accurate job data to help you interpret the ever shifting ground of the labor market and the economy at large. See a granular breakdown of November’s job data below.