Job seekers are unhappy with the cooling labor market

Employees are deteriorating due to the state of the labor market.

Job seeker confidence fell to the lowest level in more than two years in the second quarter of 2024, according to a quarterly report. questionnaire by ZipRecruiter, which has been tracking the statistic since the first quarter of 2022 The decline suggests that workers are more pessimistic about their ability to land the job they love.

Workers had reason for euphoria two to three years ago: the job market was red hot and, in many ways, historically strong.

The economy has remained remarkably resilient, even despite an aggressive interest rate hike campaign by the US Federal Reserve to curb high inflation.

However, the labor market has gradually slowed down. Workers are now having a harder time finding jobs and the labor market, while still solid, could be in trouble if it continues to cool, economists said.

“There is now reason in the data to understand why job seekers are feeling down,” said Julia Pollak, chief economist at ZipRecruiter. “The labor market is really deteriorating and job seekers are noticing that.”

Demand for workers rose in 2021 as Covid-19 vaccines rolled out and the US economy largely reopened.

Vacancies hit record highs, giving employees wide choice. Companies competed for talent to increase pay quickly. In January 2023, the unemployment rate will increase touched 3.4%, the lowest level since 1969.

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Workers could do that resign easily traded their jobs for better, better-paying jobs, a period that became known as the Great Layoff or Great Reshuffle. In 2022, more than 50 million people quit, a record high.

The U.S. economy avoided the recession that many economists had predicted, even as inflation fell significantly. However, many Americans were still feeling down about the economy, a so-called “vibecession” — a sentiment that persists despite the relative strength of the economy as a whole.

However, many employment figures have fallen back to crude pre-pandemic levels. The number of recruitments by employers is at its highest lowest since 2017.

“The post-pandemic excesses in the US labor market have largely disappeared,” Preston Caldwell, senior US economist at Morningstar Research Services, recently wrote.

The unemployment rate has also increased to 4.1% as of June 2024. While that rate is “consistent with a strong labor market,” its steady increase is the “worrisome factor,” said Nick Bunker, economic research director for North America at Indeed. Hiring Lab, wrote in early July.

The broad adjustment of the labor market is “largely welcome” as it returns to the pre-pandemic equilibrium, Bunker said. But any further cooling “is a riskier proposition,” he said.

“For now, the labor market remains robust, but the future is uncertain,” he wrote in early July after the latest set of monthly jobs data from the federal government. “Today’s report shows that labor market temperatures are still pleasant, but if current trends continue, it could become uncomfortably cold again.”

Employee sentiment could rebound if and when the Fed cuts rates, which could help households by lowering borrowing costs, Pollak said.

“People seize on good news and get very excited,” she said.