January Jobs Report: a Paradox?
Written By Abby Carter | February 9, 2023
At the beginning of February, The Bureau of Labor Statistics released jobs data that shows U.S. employers added more than twice as many jobs as economists expected in January. Economists were planning for 200,000 and 517,000 jobs were created.
“Today’s report is an echo of 2022′s surprisingly resilient job market, beating back recession fears,” said Daniel Zhao, lead economist for job review site Glassdoor. “The Fed has a New Year’s resolution to cool down the labor market, and so far, the labor market is pushing back.”
Growth across a multitude of sectors helped propel the "massive beat against the estimate".
According to CNBC, leisure and hospitality added 128,000 jobs to lead all sectors. Other significant gainers were professional and business services (82,000), government (74,000) and healthcare (58,000). Retail was up 30,000 and construction added 25,000.
Of course, an important question is...
What does this mean to us as HR professionals?
It feels like a paradox.
We’re hearing about BIG company layoffs almost every week, yet this is the lowest unemployment rate we’ve seen in 53 years?
It’s important to note that most of the layoffs we’ve been learning about have been from big brands in the information services field like Meta, Salesforce, Twitter, Alphabet, and Microsoft. The workforce is substantially made up of Small to Medium-Sized businesses, which means those big tech companies only contribute to a small portion of the U.S. workforce at large. In January, the labor market gained serious traction in other major industries like hospitality, healthcare, and government.
“Businesses continue to try and retain as many workers as they can, despite a slowdown in economic activity and an increasingly uncertain outlook,” said money market economist Thomas Simons at Jeffries LLC.
“A stunningly strong jobs report raises serious doubts about the economy slipping into recession and the Fed ending its tightening cycle this spring,” said Sal Guatieri, senior economist at BMO Capital Markets.
HR Analyst, Josh Bersin, sheds light on what this news means for companies:
It will be much harder to hire.
It will take longer to get candidates to make decisions because they have more options.
Your employment brand will become very important because there are more options for more people.
Internal mobility is now vital to your success because it will be hard to hire.
Companies need to continue to find new ways to add unique value to the market.
Productivity is the king of your job going forward.
Remember, tech serves as an aid, but humans are making your company more successful.
The January jobs report brought great news for HR professionals. It provided enough for us to pause our caution-first approach to hiring and begin to approach it with an opportunistic and optimistic mindset moving forward.
We would love to help you with your recruitment advertising strategy in the midst of the confusing (but exciting) news.
Chat with one of our recruitment experts to find that hard to reach talent here.
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