The 2023 economic and employment outlook has continued its recent trend of uncertainty, due in large part to the upheaval created by the pandemic and the subsequent fallout and reassessment period we’ve needed to adjust to our new normal.
Here’s where we stand at the start of Q3: The labor market is cooling, but still solid, which, in the larger economic outlook, can prove to be a positive development. After several consecutive months of historic job growth (marking a rebound from pandemic-related layoffs), more predictable outcomes create the balance that’s much needed in an unstable economy.
But, what does that mean for job seekers who are hoping to make a career change this year?
The 2023 Halfway Point by the Numbers
Q2 2023 got off to a strong start employment-wise, with April and May’s payrolls both beating expert predictions and proving the jobs market remained one of the most iron-clad aspects of the economy. The good news? The data proves that the U.S. labor market has recovered by nearly every measure in the wake of the pandemic. The not-so good? Those continued gains can prove problematic for the larger economic picture, pushing the unsustainable wage increases that can contribute to inflation.
Prospects began to level off in June, with a gain of 209,000 jobs, less than estimates, but still reflecting healthy and tenable growth — any month when the U.S. economy adds more than 200,000 jobs is considered a positive development.
In addition, inflation also cooled significantly in June (the 12th straight month of leveling and its slowest pace in more than two years), fueling more optimism for a so-called “soft landing” for the U.S. economy after months of speculation amidst the Federal Reserve’s rate hikes. Interest rate increases work to halt inflation partly by slowing the job market and holding back wage increases, so the Fed’s fight against inflation and the strength of the labor market are closely tied. However, the Fed also chose recently to raise the key interest rate to its highest level in more than 20 years to try to further tamp down consistently hot consumer spending. By raising interest rates, the Fed hopes to make borrowing and investing more expensive, thereby reducing overall demand for goods, services and labor in the economy.
If inflation can lower sustainably without a jump in unemployment or an economic recession, it could allow workers to hang on to the momentum they have made over the past three years since the pandemic: jobs that offer better pay and improved work-life balance, making this an especially auspicious time for prospective candidates. This takes into account the new roles that are constantly being created in today’s evolving marketplace, as well as the myriad opportunities that remote and hybrid work present.
Which Industries Are Hiring Now?
Payrolls processing firm ADP conducts its own employment research each month and found that private employers added 497,000 jobs in June, crushing a Dow Jones prediction of 220,000 and demonstrating the largest monthly gain in private-sector jobs since July 2022. Annual pay also increased by 6.4%, down from 6.6% in May, indicating slow but sustainable growth.
The leisure and hospitality sector led the gains in private-sector job gains, with 232,000 new hires, followed by construction, trades, transportation, and utilities.
What About Layoffs?
The beginning of 2023 was marked by headlines of high-profile layoffs at some of the country’s most well-known companies across a range of industries, including manufacturing, big tech, entertainment, banks, and startups.
Recent reports show a reverse of this troubling trend, with layoffs dropping nearly 50% from May to June, a seven-month low. Job cuts in the tech industries, one of the hardest hit sectors earlier this year, began dipping in April, and many companies are continuing their hiring practices. In its Workforce and Learning Trends 2023 report, CompTIA found that 71% of HR professionals are hiring for growth and 52% were continuing to backfill hires in the pursuit of adding employees with the necessary skills that can help organizations gain or maintain their competitive edge.
How Job Seekers Can Stay Ahead of the Economic and Employment Trends
As a leading executive marketing and job finding service, we cannot stress this enough: Only you can determine when is the right time to expand upon your career trajectory. All of the economic and employment data in the world can’t compare to your own needs and wants for your personal and professional growth.
We track these trends to give you a macro sense of where the employment market stands; however, with the right team in your corner, you and your job search can survive and succeed, no matter what the larger outlook.
Contact us today to learn how we can help you transcend the trends, take ownership over your professional profile, ace every interview, and — most significantly — connect with the top companies where your unique talents will be utilized and valued.