Monday, August 29, 2022

The Surprise in a Faltering Economy: Laid-Off Workers Quickly Find Jobs

People losing jobs are rapidly landing interviews, multiple job offers and higher pay, holding down unemployment totals

By Sarah Chaney Cambon of The WSJ. Excerpts: 

"But one characteristic of today’s economy is that job cuts at small startups and large companies have yet to dent the overall labor market. Labor demand is still historically strong, offering only faint signs of cooling. There are nearly two job openings for every unemployed person seeking work. That means many workers who are losing their jobs are quickly landing jobs. Some are even weighing multiple offers and accepting positions that pay more and better align with their skills.

“With unemployment so low, job openings so high and the quits rate so high, we’re finding that the balance of power is still with the job seeker,” said Paul McDonald, senior executive director at staffing firm Robert Half.

Initial jobless claims, the number of applications for state unemployment benefits, have risen this summer after hitting a half-century low in the spring. In the week ended Aug. 13, a seasonally adjusted 250,000 workers filed for benefits, above the 2019 prepandemic average of 218,000 and a sign that layoffs have ticked up.

Meanwhile, continuing claims, a proxy for the number of people claiming ongoing jobless benefits, have increased at a much slower rate. Continuing claims were about 1.4 million in the week ended Aug. 6, below their 2019 average of 1.7 million. Relatively low and stable continuing claims could indicate workers are leaving unemployment rolls quickly as they regain employment, some economists say."

"The typical unemployed worker had been off the job for 8.5 weeks in July, down from 14.4 weeks a year earlier, according to the Labor Department. The shorter duration of unemployment suggests many unemployed Americans are finding jobs fast as fewer leave the labor force, said Julia Pollak, chief economist at ZipRecruiter.

Shorter episodes of joblessness defy economists’ concerns earlier in the pandemic that workers would suffer from long-term spells of unemployment of 27 weeks or more like they did after the 2007-09 recession.

The share of all jobless Americans unemployed for less than five weeks surpassed the share of those out of work for at least 27 weeks in January, according to the Labor Department. The gap has since widened. By July, nearly 37% of unemployed workers had been out of work less than five weeks, roughly double the percentage experiencing long-term joblessness."

"Employers had 10.7 million unfilled jobs in June, down from a record of 11.9 million in March, but still well above the 7 million job openings in February 2020 ahead of the pandemic, when the labor market was also booming.

Job-openings rates across industries are much higher than before the pandemic hit, suggesting companies still need workers even in sectors where company layoffs have been pronounced, such as technology, real estate, finance and insurance.

Longer periods of unemployment can allow job seekers more time to search for roles that match their skill sets, some economists say. But with job opportunities so abundant, many unemployed workers are finding jobs that suit them within a matter of weeks or even days."

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