Share Of Unemployed Workers Finding Jobs The Following Month
Recent jobs data have been volatile, with 5 of the last 10 months alternating between positive and negative readings. Some investors attribute the monthly volatility to idiosyncratic events, while others point to slowing immigration and an aging population. Nonetheless, the big picture is that the labor market has weakened substantially since 2022. One way to look at it is the hiring rate, which has dipped to the lowest since October 2021, according to data released this week for February. What’s driving the slowdown? It’s complicated: Workers are not switching jobs from firm to firm as much as they did in 2022, and people outside the labor force (those not actively looking for jobs) are not returning to the workforce. More importantly, fewer unemployed workers are getting hired. In 2022, over 30% of unemployed workers found a job the month after; today, less than 24% do. The average duration of unemployment among workers has also increased by 36% since 2022. Regardless of what the nonfarm payroll data show on Friday, the bigger picture is that the U.S. labor market is characterized by lackluster hiring.
