Are we already in the midst of a recession? The job market doesn’t think so.
While a recession is defined (by technical terms) by gross domestic product (GDP) shrinking for two consecutive quarters, some experts argue that we’re already in one, especially if August’s GDP data follows the first quarter’s 1.4 percent decline.
But even amid recession fears, the labor market is proving to be a bright spot.
According to the Bureau of Labor Statistics, the U.S. economy added 372,000 jobs in June — a number much higher than the 250,000 jobs that economists predicted. This healthy bolster in jobs means that the private sector has fully recovered from the jobs it lost during Covid. Many economists and forecasters took the strong numbers as a clear indication that a recession is still distant.
When it comes to hiring, the outlook looks mixed.
While it may appear that job seekers have more options, there are also signs that employers are cutting back. Recent job cuts data from Challenger, Gray & Christmas revealed that U.S. employers announced 32,517 layoffs in June — a nearly 60 percent increase from the same month last year. But if we look at the total number of job cuts through the first half of the year, they’re down 37 percent from the same period in 2021. What’s more promising is that they’re at their lowest levels since the data was first recorded in 1993.
The U.S. labor market is still enduring a period of incredibly high demand for workers, senior economist for labor market data firm Lightcast Layla O’Kane told CNN.
“We’re seeing very high openings and very low separations,” she told CNN about the latest JOLTS data. “Right now, companies are still looking for a ton of workers and trying to fill those positions. I would be surprised if the labor market shifts into a rough market for workers any time soon.”
Even with the robust labor market recovery, fears of a recession are still valid. The Federal Reserve is aggressively raising interest rates to reduce high inflation, which could have a ripple effect on businesses and the labor market.
Tell us, is your company pulling back on hiring efforts amid recession concerns? Weigh in here.