Now begins to (but just a little).
By Wolf Richter for WOLF STREET.
There have been countless layoff announcements, some of them by big tech and social media companies, others by companies that are constantly losing money and suddenly have to save money. – as per BuzzFeed earlier this week to lay off 12% of its staff, or today per meal-delivery-penny-stock Blue Apron will lay off 10% of its staff. Most announced layoffs number in the hundreds. Some were bigger, like Meta with 11,000; and Twitter, a total mess of firings, resignations and returns please. But these are still small numbers compared to the 153.5 million total employees in the United States.
But there are still a historically huge number of vacancies. Even as some workers at tech and social media companies are being laid off, industrial companies, automakers (they’re investing heavily to grow their electric vehicle divisions), and others are desperately trying to hire tech workers.
Ford, for example, is downsizing in its legacy divisions, where sales are plummeting, but is hiring tech and engineering talent in its EV division, where sales are skyrocketing and where it has to start all over again, including the design and construction. vehicles, software, supply chains, factories, etc. These companies were starved of tech talent because they couldn’t compete with the rich compensation packages and stock options offered by companies like Twitter or Meta. But now they might be able to attract talent.
US company layoff announcements are global layoffs, and some of these layoffs affected staff in other countries. For example, Twitter’s layoff figures included its layoffs in India, where it emptied its office. Twitter also canceled thousands of contractors, many of them in other countries.
Then there are H-1B visa holders. Technology and social media companies, as well as other companies with technology divisions, have large staffs made up of people from other countries who are in the United States on H-1B visas. And layoff announcements include them. But these people only have 60 days to find another employer after their current job ends. If they cannot, they are considered “out of status” and should theoretically leave the United States.
When workers with H-1B visas are laid off, they are not eligible for unemployment compensation in the United States, and therefore they do not appear in the unemployment insurance claims that we are going to review.
And once they leave the country, they no longer appear as “unemployed” in the monthly employment report.
These are among the reasons we haven’t seen a surge in weekly Unemployment Insurance claims by the Labor Department.
But the trend has changed directionbecause “continuing claims” (unemployment insurance claims from people who have not yet found a job at least a week after their initial claim) are now on the rise, even if they remain historically low.
Initial unemployment insurance claims: 230,000 people filed an initial claim for unemployment insurance with their state unemployment offices in the week through Saturday, according to the Labor Department today. This was in the same low range as the previous weeks (a bit up from last week, a bit down from the previous week) and in the same low range as before the pandemic:
The long-term view of initial UI claims shows how low they still are. For the labor market to loosen significantly, the number of initial jobless claims would have to exceed the 300,000 mark. When the recessions happened (purple columns), the number of initial weekly claims reached a peak of 350,000.
This shows that most people who were made redundant found a job so quickly or already had a new job waiting that they did not need to file an unemployment benefit claim.
But some people are now finding it harder to find a new job. The number of people still claiming unemployment insurance at least a week after the initial claim — people who have yet to find another job — has risen to 1.67 million, according to the Labor Department today. today.
It’s still historically low, about as low as during the low points just before the pandemic, and far lower than anything since the mid-1970s (when there were far fewer workers).
But it shows that the trend has turned solidly, that some people are having a harder time finding a new job and are staying on unemployment insurance a bit longer. This is a sign that the labor market is slacking off a bit:
This is the short view:
The long-term view shows how historically low the 1.67 million continuing claims are. But it also shows that the trend is now up, after having reversed course solidly. During the mild recession of 2001, these continuing claims reached 3.7 million. During the Great Recession, they rose to 6.6 million.
We’ve had other indications that the labor market is getting a little less tight, but still very tight. Weekly unemployment insurance claims are the most recent data we have. And they paint a job market that’s still incredibly tight, given all the layoff announcements, but it’s starting to loosen up a bit to the point where some of the people who lost their jobs — and those might not be tech workers – have to look a little longer to find a new job and stay on unemployment insurance a little longer.
To stay with the “soft landing” analogy, the labor market is not landing at all yet, but it is losing some altitude.
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