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Evolving jobs landscape could signal end of Great Resignation

Hiring
Posted at 9:28 AM, Aug 02, 2022
and last updated 2022-08-02 15:47:47-04

The job market cooled off slightly in June, according to federal data published Tuesday. There were 10.7 million job openings.

While that is higher than pre-pandemic levels, it represents a loss of about 700,000 jobs compared to May.

The total number of job openings is down about ten percent from a peak in March.

"The labor market is definitely cooling down," said Daniel Zhao, senior economist at Glassdoor. "At the same time, it's still very hot. We're just going from white hot to red hot."

Several sectors posted a large decline in job openings, including construction, manufacturing, and leisure and hospitality.

The retail industry was hit hardest: The number of available jobs dropped 29% from May to June.

Analysts blamed the continued impact of inflation.

"If the consumer shifts more of their spending to necessities, there may be less dollars left over for discretionary things, like apparel or other items," said Scott Blumsack, chief strategy officer at Monster. "That may impact the retail landscape."

Not all sectors scaled back.

There were more education and health care jobs posted in June compared to the previous month.

"Especially areas like registered nurses," said Blumsack. "There is still a continued demand for nurses in the health care sector."

Balancing the labor market

Conditions are still favorable for job-seekers.

There were nearly two open jobs for every person seeking work in June.

But Tuesday's report from the Bureau of Labor Statistics showed signs that people are less willing to hop from one position to the next.

The number of people quitting their jobs went down in June.

The number of layoffs declined slightly as well.

"What we're seeing is that employers are very hesitant to lay off the workers that they've spent the last year desperately trying to hire and retain," said Zhao.

Both numbers could remain low through the end of this year.

Only 8% of companies believe there will be hiring freezes or layoffs in the near future, according to data from Robert Half.

"The Federal Reserve is trying to cool down the job market, in an attempt to keep inflation under control," Zhao said. "We should expect to see the job market continue to slow over the rest of the year. That might be reflected in diminished job openings or even slower hiring; we're still unsure how that's going to play out as the Fed tries to move toward a soft landing."

The prediction lines up with data from Robert Half, whose analysis showed 46% of companies plan to add new positions during the second half of the year.

That's down from 65% in the first half of 2022.

Zhao said the shift in the market could eventually spell the end of the Great Resignation.

It may also cause historians to look back at what drove the phenomenon in the first place.

"A lot of people say the Great Resignation is because people are reevaluting their life choices, or what they value in a career versus what they value over their whole life," Zhao said.

"But to be honest, it seems like the Great Resignation is very much the natural result of a tight labor market, where workers have more opportunities to hop to a better job."