Hello, everyone.
I'm Daniel Culbertson, Senior Economist at the Indeed Hiring
Lab.
Here at the labor market outlook for 2022,
where I'd like to walk us through some
of the major questions for the labor market in the year ahead.
First, let's take a look back at 2021 as
measured by job postings on Indeed site.
On this plot, as always, we are showing the overall trend
in job postings on our site as the percent change
from February 1, 2020.
If you focus on the year of 2021,
you'll see the job postings on our site
consistently grew throughout the year,
except for a little bit of softness in the month of August
during the rise of the Delta variant.
As of our most recent reading on January 14th,
we are 60.8% above our pre-pandemic baseline.
On the far right side of this chart,
you'll also notice a little bit of softness
in the first two weeks of this year.
Most likely attributable to the Omicron variant
and certainly something that we will be keeping an eye on.
Let's move on to the three major questions
for the labor market in 2022.
First, the temperature in the labor market
soared in 2021 as demand for workers outran supply,
but just how hot can the labor market remain in the new year.
Let's first look at one key measure
that shows just how tight the labor market is.
This plot, featuring data from the Bureau of Labor Statistics,
shows the number of unemployed workers
that are out there for every job opening.
This figure is below one, meaning that there are more job
openings out there than there are unemployed workers
to take those jobs.
You can also notice that on the right side of the chart,
compared to the far left side of the chart,
this figure is well below its pre-pandemic level,
which was also quite a strong labor market.
This is the result of strong demand running up
against labor supply constraints,
such as concerns about the virus,
childcare responsibilities, and pent-up savings.
We could get some relief from these factors this year
if we make progress against the pandemic and household
spend down those savings, prompting some of those workers
to come back to the labor market.
The second question for the labor market in 2022
is, how long will pandemic spending habits continue?
This plot of personal income expenditures
shows the disparity between goods and services spending,
which is important to consider as spending
patterns substantially influence labor market trends.
Good spending quickly rebounded from the pandemic
as we all began to shop online, while service spending
continued to lag and is about 1.3%
below its February 2020 level.
We saw this trend reflected in Indeed job postings data.
Throughout 2021, goods-related sectors,
such as manufacturing and warehousing,
thrived, while service-related sectors,
like tourism and beauty and wellness, continue to struggle.
In the fight against COVID-19, if we make more headway
in 2022, consumer demand could shift back
towards services and fuel job posting growth
in those sectors.
The last question for the labor market in 2022
is how much further can remote work extend?
It's very difficult to predict the long run,
but it's somewhat safe to say that remote work will remain
more prevalent after the pandemic
compared to what it was before.
But for now, we can rely on Indeed job posting
and job search data to see how these trends have progressed.
This plot shows the percentage of all searches on Indeed
that contain keywords related to remote work.
You can see that job seeker interest in remote work
rose throughout the second half of 2021
and is near an all-time high.
While on the employer side, this plot
shows the percentage of job postings on Indeed
that are for remote work.
While this trend certainly has a bit less volatility,
the trend line remains largely the same.
And on the right side of the chart,
you can see that job postings on Indeed
featuring keywords related to remote work
are near an all-time high.
In summary, the short-term outlook for the labor market
suggests that workers will continue
to have considerable bargaining power in 2022.
While more workers may enter the labor force
if we make progress against the pandemic, demand for workers
seems likely to remain strong this year.
Even a slight slackening of the labor market
would still keep job seekers in the driver's seat.
That's all for now.
As always, you can keep up with our research at hiringlab.org.
Thank you for your time and your attention.
And until next time, take care.