Astounding! Awesome! Boffo!
Take your pick … contrary to the negative headlines and worries about the economy, the January employment report crushed it.
The economy produced 353,000 jobs to start the year, about two times the expected result. The unemployment rate remained at 3.7 percent and importantly, average annual wages were up by 4.5%, which means that workers continue to earn more than the annual inflation rate (currently 3.4%, as measured by CPI).
One quick note about prices. If you have not received a bump in pay over the past few years, inflation has really knocked you for a loop. But according to the U.S. Treasury, wages adjusted for inflation (“real wages”) for the median worker grew 1.7% between 2019 and 2023.
“This means that one week of pay for the median worker now buys more than a week of pay did in 2019, despite higher prices.” And the best gains skewed “toward the middle class and the lower end of the income distribution.”
The January data also caught many by surprise, because there have been a number of companies that have recently announced layoffs. In parsing these headlines, it’s important to distinguish between industries that are still robust (tech) and those that are actually consolidating (traditional media).
For example, Amazon has reduced the number of total employees globally from a peak of 1.6 million in 2021, to about 1.5 million as of the end of last year. But look back to 2019 and Amazon’s workforce was just 800,000, so over the past four years, the growth has been staggering.
The same goes for Salesforce, which just announced another round of layoffs of about 10% of its workforce. Even with the cuts, the company has grown the number of employees by 30% since 2020.
Meanwhile, job reductions in traditional media could be permanent (whomp-whomp), because it is an industry that is facing major headwinds and will likely get smaller.
If you are worried about losing your job, you may want to head back to the office. According to new research, workers who are fully remote are 35% more likely to be laid off.
Some workplace experts say that working from home makes it harder to build relationships. Management may also find it a little bit easier to let someone go who they don’t see every day. And for those who still seek to work from home despite the risk, you should understand that opportunities are dwindling. When some companies announce layoffs, (UPS and Wayfair), they are pairing them with mandates to bring workers back five days a week.
All of this is important information for those seeking a new job.
A new report from Monster found that a whopping 95% of workers are looking or planning to look for a job. Now, this could be an aspirational goal to start the New Year, as in “I’m going to work out more and look for a new job.”
In other words, this is a survey about what people want, but according to the Labor Department, the number of people quitting voluntarily has been dropping steadily over the past two years. The quits rate peaked at 3% at the end of 2021 (peak “Great Resignation”) and as of December, was at 2.2%. Before the pandemic, the quits rate was 2.3%.
If you are seeking a new job, the January report showed active hiring in Professional and Business Services (+74,000), Health Care (+70,000) and Retail (+45,000).
Instead of confining your search to your own industry, it may make sense to find a way to deploy your skills and apply them to one of these sectors.
Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at [email protected]. Check her website at www.jillonmoney.com.