A Strong Year for Hiring with Another 315,000 Jobs Added in August
The economy added an impressive 315,000 jobs in August, right in line with economists’ expectations of around 320,000. This does not look like a labor market entering a recession.
August’s job growth is still well-above the pre-pandemic average, where 200,000 jobs added would be a solid number. With unemployment rates near pre-pandemic lows and nearly two job openings for every unemployed person, U.S. businesses need to focus on retaining talent.
August’s solid job gains are a sign that the labor market is going strong, despite talk of a recession or slowdown. This month’s job gains bring the total for 2022 to over 3.5 million, an average of 456,000 jobs added per month.
The labor market remains tight and the competition for talent is fierce. Job openings – a key indicator of labor demand – hires, quits and layoffs are reported on a lag. And July’s job openings released earlier this week showed that job openings remained steady at 11.2 million, still nearly double the pre-pandemic monthly average of around 6 million job openings. While job openings have fallen from record highs earlier in the year, the pace of job gains still highlights that demand for talent and competition are strong.
And while there have been some high-profile layoffs, especially in the technology space, layoffs remain essentially unchanged month-over-month and near historic lows at 1.4 million per month, compared to around 1.9 million monthly layoffs before the pandemic. When workers do lose their jobs, there’s enough demand out there that they aren’t staying unemployed for long. With 11.2 million job openings but only 6 million unemployed workers available to fill those open roles, there are nearly two open jobs for each unemployed worker.
The unemployment rate ticked up to 3.7% in August, largely due to a much-needed increase in labor force participation. The labor force, which includes the total number of people who are employed or unemployed and looking for work, increased by 768,000 in August. This is good news for companies looking to hire – the pool of available talent got a bit bigger in August.
Despite moderation, 2022 continues to be strong year for hiring
August’s jobs report, including downward revisions for June and July, highlights what many have expected: a more modest pace of job gains is inevitable given unprecedented growth over the past year-and-a-half, especially given a labor force that has yet to grow at the pace needed to keep up with hiring demands.
Last month, the economy reached the important milestone of recovering all jobs lost to the pandemic. However, that recovery has not impacted all locations and industries evenly. While there are broader economic challenges, and hiring is likely to slow in the coming months, 2022 will close out as a strong year for hiring. The tight labor market and turnover are likely to subside somewhat but remain elevated in 2022 – LaborIQ® projects 230M total job openings, hires and quits in 2022.
Now that we’ve exceeded pre-pandemic employment levels, monthly job gains will continue to moderate. The silver lining here for businesses is that record turnover – which has been driving the Great Resignation – will likely start to subside, giving human resources and talent acquisition more time to focus on the day-to-day.
LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.