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Have you got itchy feet?
The U.S. economy added 236,000 jobs in March, just shy of the 238,000 forecast by economists polled by the Wall Street Journal. The unemployment rate declined to 3.5% in March from 3.6% in February.
The latest data was calculated before the collapse of Silicon Valley Bank and Signature Bank last month, an event that could lead to tighter lending criteria by banks in the months ahead. (The tech sector has shed more than 168,000 jobs since the start of 2023.)
The U.S. created an estimated 311,000 jobs in February and 504,000 in January. Both easily surpassed most economists’ expectations, and the latest figures are likely to trigger more concern at the Federal Reserve about inflation.
But what does this mean for workers who want to earn more money to keep up with inflation — and who believe that switching jobs is their best chance to get a significant pay increase? What about those who are unhappy in their jobs and want to make a change? Is the employment situation still stable enough to take that chance?
“What does this mean for workers who believe that switching jobs is their best chance to get a significant pay increase? What about those who are unhappy in their jobs and want to make a change? ”
The 200,000-plus increase in in jobs March is still regarded as quite a strong performance, especially given that the U.S. added an average of 173,000 new jobs a month in the year before the onset of the pandemic in 2020.
But the latest jobs report is uneven. “The increase in employment is concentrated in just a few sectors, with the largest gains in leisure and hospitality, where the level of employment remains 2.2% below its pre-pandemic peak,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.
“Job growth slowed in March, and wage growth decelerated further, with average hourly earnings now up 4.2% over the past 12 months,” he added. The jobs market is still quite strong, he said, “but beginning to flag, lagging other indicators of a slowing economic activity and tightening credit.”
“Although situations vary widely depending on locations and employment sectors, it is still a good time to look for work,” said Mark Hamrick, head of Bankrate.com’s Washington, D.C., bureau. “The Labor Department says there were nearly 10 million job openings at last count, indicating about 1.7 jobs open for every unemployed individual.”
A stable — and a bigger — paycheck is a motivator for many job jumpers. “Recent data from ADP indicates that job changers are getting pay increases that are about two times higher than those who stay put,” Hamrick said. “From our own Bankrate survey of job seekers, we know that workers are trying to balance the desire for higher pay with more optimal working conditions.”
Daniel Zhao, lead economist and senior manager for data science at the careers website Glassdoor, noted that job market remains “surprisingly resilient,” saying, “Job openings are still well above prepandemic levels, but, as the labor market cools, job seekers will have to reconsider how much they value switching to a better job versus locking down job security.”
Companies are still hiring, Zhao said, and opportunities remain for people who do their research. And, he added, “the emotional and financial cost of staying in a bad job shouldn’t be underestimated. It’s always a good time to get out of a bad job.”
Storm clouds
But there are some storm clouds on the horizon. “This will likely be a more challenging job market for those graduating from colleges and universities this spring, depending on their majors and skill sets,” Hamrick said. “Technology, as we know, has been leading the charge on job cuts, and that condition may prevail for a while. [In the] longer term, it will continue to be a vitally important part of the American and global economies.”
A slew of Silicon Valley giants have already announced job cuts in 2023. They include — deep breath — Amazon.com Inc.
AMZN,
DocuSign Inc.
DOCU,
Salesforce Inc.
CRM,
Zoom Video Communications Inc.
ZM,
eBay Inc.
EBAY,
Dell Technologies Inc.
DELL,
PayPal Holdings Inc.
PYPL,
Intel Corp.
INTC,
Microsoft Corp.
MSFT,
Spotify Technology
SPOT,
and Google parent Alphabet Inc.
GOOGL,
Many workers have felt like they’ve been in rough waters in recent months, either because they’re not being paid enough to keep up with the rising cost of living or because they were let go from jobs that had seemed secure. And the manner in which some announcements were made led, in some cases, to a backlash on social media.
Erik Bernstein, president of Bernstein Crisis Management, can see how some of those tech layoffs could spook workers in other industries. “Employers need to be aware that large-scale layoffs are always newsworthy, and particularly so right now, with the nation’s eyes on the unemployment numbers and a spate of poorly handled corporate downsizing efforts in recent memory,” he told MarketWatch.
“The first thing most people want to know when they read about job losses or job gains is, what does this mean for me? ”
“While sometimes you have no choice but to lay off employees, how you handle that process often determines whether it stays at the level of an unfortunate reality or escalates to an event with potential for long-term reputational harm,” he added.
The first thing most people want to know when they read about job losses or job gains is, what does this mean for me? “I would imagine that question is being asked a lot,” Bernstein said, “particularly in hard-hit industries like tech, and if employers aren’t providing an answer, I guarantee their employees are heading to the online rumor mill, which will likely leave them even more concerned about the future.”
One reason workers might stay put is job security, Hamrick noted. “Since most people are reliant on income from work, maintaining the consistency and quality of that income stream is key for achieving financial goals like saving for emergencies and retirement as well as paying down debt,” he said.
And the memory of those early days of the pandemic is still fresh. “We witnessed either from afar or firsthand,” he said, “that when millions of Americans lost their jobs in the early months of the pandemic, those who didn’t have sufficient emergency savings needed help from charity to keep food on the table.”
