Disappearing "Help Wanted"... Signs of Cooling in the US Job Market

Contrary to government statistics indicating that the U.S. labor market remains overheated, analysis suggests that the private sector is showing signs of a rapid cooling.

The Wall Street Journal (WSJ) reported on the 1st (local time), citing data from U.S. job platforms ZipRecruiter and Recruit Holdings, that corporate job postings at the end of last year decreased more than the job openings announced by the U.S. Department of Labor.

[Image source=AP Yonhap News]

The U.S. Department of Labor announced that job openings in December increased by 49% compared to February 2020, before the COVID-19 pandemic surge, but the number of job postings counted by ZipRecruiter in December rose by only 26.7%. Moreover, in January and February, the increases were limited to 23.2% and 16.38%, respectively, showing a rapid decline.

Statistics compiled by research firm LinkUp and the National Federation of Independent Business (NFIB), representing small business owners, also showed a trend of job postings declining faster than the government’s employment figures.

Julia Pollak, chief economist at ZipRecruiter, stated, "Employment indicators have not yet shown signs of slowing down, but they will soon. We are discussing future hiring plans with companies, and they are currently concerned about overemployment."

In particular, ZipRecruiter analyzed that the decline in employment was most pronounced in the technology sector. The number of job postings in technology peaked in May 2022 and returned to pre-COVID-19 levels last month. In the service sector, while the government reported a 54% increase in employment in February compared to pre-pandemic levels, ZipRecruiter’s data showed only a 25% increase.

Pollak noted, "We can see large-scale employment declines in almost all sectors except healthcare."

As the U.S. labor market rapidly cools, the Federal Reserve (Fed) is expected to feel less pressure to raise interest rates. The tight U.S. labor market since COVID-19 has supported wage increases for workers, fueling inflation. In January, nonfarm payrolls turned positive for the first time in eight months, undermining market expectations that the Fed would raise benchmark interest rates only until March.

The WSJ stated, "The decline in job postings may signal that the Fed is achieving its goal of lowering inflation," but also expressed concern that "if this trend leads to widespread layoffs, the economy could slip into a recession beyond the Fed’s intended slowdown in inflation."

This content was produced with the assistance of AI translation services.