On paper, the job market now looks solid.
Unemployment hit a 54 year low at 3.4% back in
January of 2023, and U.S.
employers added 2.7 million people to the
payroll in 2023 alone.
The January jobs report also showed the 2024 labor
market was off to a solid start.
When we look at the hard data, it seems to suggest
that the labor market has been fairly strong and in
fact, surprisingly resilient, especially
after 2023 where we had headlines about layoffs
and forecasts of recession. But when you
look at the soft data, Americans tend to be a
little bit less optimistic about how the
economy is doing and in particular about the job
market.
Politicians just talking about how the economy is
so great. I just want to scream from the rooftops.
But then how come no one can find a job?
Recently, unemployed full time workers applied to an
average of 30 jobs only to receive an average of
four callbacks or responses.
If you look at the job vacancies, they're down a
little bit, but not down enormously. But if you
ask, you know, how hard are you working to fill
them? The answer seems to be not very right now.
So why does it feel so hard to get a job right
now? And is the U.S.
labor market as strong as it seems?
Hi. My name is Jenna Jackson.
I'm from Ardmore, Pennsylvania, in suburbs
of Philadelphia.
This job market is like the craziest that I have
ever seen.
I was frustrated just with how my job search
process has been going.
I haven't quantified how many applications I've
applied to. It would be a little depressing, I feel
at this point to quantify it.
But it was definitely in the hundreds, at least.
55% of unemployed adults said they were burnt out
from searching for a new job.
Younger generations were impacted the most, with
66% complaining of burnout stemming from job
search.
Looking for a job can be a full time job.
There's a lot that goes into it.
Filling out applications online can be tedious and
can be time consuming and can be really stressful.
Every day, it just feels like Groundhog Day or
waking up doing the same thing.
When I looked at the data, if you just applied to a
job through a job board, the odds of you getting
hired were about 3%.
So you got to apply to a lot of different jobs in
order to have a chance to get them.
And you're going to get lots and lots of just no
responses. And it's exhausting if you do that.
A 2023 study from Glassdoor revealed that
mentions of applicants being ghosted by their
prospective employers grew substantially since
before the Covid 19 pandemic.
We often hear from job seekers that they send out
tons and tons of applications, and they
don't even hear back, and that that can be very
emotionally and mentally taxing.
It's unprofessional as well.
It's like, especially if you're going to take the
time to do an interview with them, you could at
least let them know.
I think it's because of technology.
It's easy to put up a job and so many people can see
that job. So when you get such an overwhelming
response, it's often very difficult to get back to
every single solitary candidate.
Certainly during the Great Resignation, when
the market was at a fever pitch, companies were
being ghosted by candidates, which is
something that hadn't happened as much in the
past. So we've seen it happen on both sides of
the fence. And I think a lot of it is caused by
just sheer volume.
The time it takes for a company to hire an
employee also hit an all time high at an average of
44 days during the first quarter of 2023, with some
industries like the energy and defense sector
taking more than 67 days for hire.
Application process has been getting longer and
longer with going through multiple rounds and doing
assessments. My worst experience so far was with
a large financial institution where I had a
phone screen with them, and I also had a zoom
interview with one of the team members.
After that, I had a case study where I was given
very vague instructions.
They got back to me and said that the team didn't
feel like there was enough, that they gave me
another attempt.
In the end, I just ended up just going back to the
recruiter and saying like, you know, 'I'm
sorry, I don't think this is the best fit.' Because
even if I did move forward and they were okay
with my revision, there still would have been
three more interviews.
A lot of employers think that doing more interviews
is a good thing.
And it's not a good thing.
Most job interviews are not doing anything
important. They don't know that the questions
they're asking are going to reveal anything about
whether you are a good candidate or not.
They don't know when they ask the question what the
right answer is.
And this is a development that's been going on for a
while. It's not a good thing for anybody.
And even if the labor market was stronger, you
would still be seeing some of this.
There are generally two terms economists use to
describe the state of the job market tight and
loose.
Usually when economists talk about a tight labor
market, they mean hot, essentially.
Mostly what that means is it is difficult for
employers to find workers.
And so in that context, employers tend to be more
hesitant to lay off workers.
They tend to try to be more aggressive about how
they hire, whether that means offering bonuses or
offering on-the-job training. By contrast, a
loose labor market or cold labor market is one
where there might be layoffs, it might be
hiring freezes. It might be difficult to find a job
for workers who are either already in the
workforce or workers who are trying to enter the
workforce for the first time.
The American labor market has remained extremely
tight following the end of the pandemic.
So many companies had to scale back during the
pandemic, and then all at once, companies were able
to hire again as their businesses started to
move. So you had so many job openings happening all
at the same time.
Job openings surged to historic highs while the
country continued to struggle from a
devastating labor shortage. With so many
plentiful job prospects, even working Americans
quit their jobs at a record pace for new jobs,
in a trend that came to be known as the Great
Resignation. But the job market is beginning to
show signs of cooling.
There's less of a frenzy on the part of the
employers. If you're somebody who wants a job,
you would like a frenzy on the part of the
employers because you would like to have lots of
people trying to hire you.
I think one interesting thing about the job market
right now is that it is strong, but the hiring
rate is low, and similarly the layoff rate
is actually very low.
The layoff and discharge rate in the U.S.
has been hovering near historic lows, despite the
barrage of layoffs reported specifically
within the more visible tech and media sectors.
So I think what might be going on here is that
employers are hesitant to lay off workers.
They're hesitant to push workers out because of
their recent experience with labor shortages.
But on the flip side, that also means that a lot
of workers are sitting tight. They're not
quitting, they're not being laid off.
And so there aren't as many of those
opportunities you would normally expect from
attrition for folks who are trying to break into
those roles.
Meanwhile, research from LinkedIn found that job
seekers search intensity in the U.S.
grew by 27% in 2023 compared to the year
before. In 2022, there was one open job for every
active applicant on the LinkedIn platform.
By 2023, the ratio turned to one job for every two
active applicants.
Right now in the marketplace, what we're
seeing is both employers and employees being a
little bit more selective. Everybody's
taking a little bit more of a measured approach
right now, being a little bit more selective in
their choices. And that's why we've seen a little
bit of a cooling in the marketplace.
However, experts reassure that the cooling labor
market is no reason for concern yet.
It is important to have a perspective that's a
little more historical on this.
You know, if you're hunting for a job right
now and you can't find one, it looks like a lousy
job market to you. But compared to your parents
experience, it's a great job market.
I think that sentiment is outcomes minus
expectations. So in 2021, 2022, there were labor
shortages. Companies were hiring very aggressively.
And so even if 2024 is shaping up to be a
relatively healthy labor market by recent
comparison, it doesn't feel quite as strong.
A cooldown in the labor market was also what the
Federal Reserve had intended with its series
of interest rate hikes.
If you are the Federal Reserve and you want to
slow the economy down, that means you want to
slow the markets down a bit.
The biggest market is the labor market.
If you look at what employers do, where their
budget is, it's mainly going to labor.
So you can't easily cool the economy down unless
you cool the labor market down.
Experts also noted that the health of the labor
market will largely rely on where the economy is
headed next.
If the economy does slow down more significantly in
2024, if we see a recession in 2024, the
labor market can be somewhat resilient, but it
can't fully buck the broader economic trends.
And so that's definitely something we want to watch
out for in 2024.
It's not a guarantee that the job market is going to
remain as strong.
Broadly speaking, we might have some optimism
about the economy.
That doesn't necessarily mean that the job search
is an easy process.
I guess the big thing I would say is it's not you.
It's not you. It's happening to thousands of
other, hundreds of thousands of people at the
same time.
And it has to do with what's going on in the
bigger economy. It has to do with uncertainty, but
it also has to do with a lot of quirkiness inside
employers about how they handle hiring these days.
It's definitely, um, difficult out there.
But I just encourage you not to give up and still
keep diving into your into your network and stay
tight with family and friends, just to give you
the emotional support that you might be lacking
at the moment and to give you that confidence that
you can do it.