Job postings hit new highs as 4.5 million Americans left or changed jobs in March, reflecting the strength of the labor market
“Demand for workers remains hot,” said Julia Pollak, chief economist at ZipRecruiter. “It’s a very broad and huge growth. Even though we have almost recovered all the jobs lost during the pandemic, the labor market continues to tighten.”
Strong data on job vacancies and worker departures could play a role in inflation-fighting talks at the Federal Reserve, which is expected to announce another interest rate hike of half a quarter. percentage point on Wednesday. Fed Chairman Jerome H. Powell cited the “extremely, historically” tight labor market as one of the main reasons he says the economy can withstand higher interest rates without crashing. recession.
US employers have created more than 400,000 jobs a month for nearly a year, while the unemployment rate of 3.6% remains near record lows. Overall, the number of job vacancies increased by 36% in March compared to the previous year. Demand for workers rose sharply in retail trade (where job creations rose 155,000 from February), manufacturing (up 75,000) and finance and insurance (up 51,000). ).
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This insatiable need for new workers has forced employers across the economy to offer higher wages and better benefits. Wages have risen 4.7% over the past year, although they have not kept up with inflation, which has risen 8.5% over the same period. Economists say they expect workers’ compensation to continue to rise in the coming months as companies compete for a limited pool of workers.
“These record economy-wide quits show that employers are under enormous pressure,” Pollak said. “They will realize very quickly that offering massive compensation packages to new recruits will no longer be enough. They’re going to have to raise wholesale salaries for existing employees, too.
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Workers who switched jobs saw their median wages rise 5.3% from a year ago, compared to 4% growth for those who stayed put, according to the Federal Wage Growth Tracker. Reserve Bank of Atlanta.
“The balance of power in wage negotiations has tipped in favor of workers,” Mickey Levy, chief economist for the Americas at Berenberg Capital Markets, wrote in a client note on Tuesday.
Grace Oppy, 26, quit her job at a New York art gallery in March. Less than a month later, she had found a better-paying position as an assistant at a large financial firm.
“There were a million openings, which was so different from the start of the pandemic when it was impossible to find a job,” said Oppy, who has spent much of the past two years unemployed after losing his job. marketing job in Paris in early 2020. “Now you can get a job. Can you afford to live? I’m not sure, but at least you can get hired.
Beyond higher pay, many workers say the strong job market has encouraged them to take risks they might not have been willing to consider otherwise. Many favor more flexible arrangements and work-life balance.
In Long Beach, Calif., Paula Hardy recently quit her job as a chiropractor at a women’s clinic to start her own mobile practice. After working six days a week for much of the pandemic, she says she has felt drained and unappreciated.
“I’ve gone from six figures a year to way below that,” said Hardy, 38, who is also taking courses to become an acupuncturist. “But I prefer to do my own thing and eat ramen noodles, even though it’s harder financially.”
It was the second time Hardy had changed jobs during the pandemic. The first time, in December 2020, she quit a position as a chiropractor for stevedores at the Port of Los Angeles after her boss insisted she continue to come to work even though she was sick with the flu.
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“I was already disappointed,” she said. “Then I got sick, and it was clear they didn’t care. The pandemic made me realize that I didn’t have to put up with this.
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