Indeed economist on labor market: ‘Demand for workers remains strong’
Indeed Hiring Lab Economist AnnElizabeth Konkel joins Yahoo Finance Live to discuss the state of the U.S. labor market, tech hiring, and the outlook for employee demand.
Video Transcript
[MUSIC PLAYING]
- Consumer spending and employer demand continue to fuel an overall strong jobs market. But as the Fed tightens rates, could that picture change? Here to chat with us more about what's going on in the labor market is Ann Elizabeth Konkel, Indeed Hiring Lab Economists. It's great to have you on the program.
Just kind of want to start things off with the commentary that we heard from the Fed this morning. They've been using the job vacancy rate. Two job postings for every unemployed person, roughly, right now, as a talking point to say this is a labor market that's out of whack. What are you seeing from Indeed's standpoint in terms of that imbalance and whether or not that's changing.
ANN ELIZABETH KONKEL: So on Indeed, we are seeing that employer demand for workers remains strong. As of June 10, job postings on Indeed are up 54.6% above their pre-pandemic baseline. And some data we just released this morning, we saw that tick down slightly as of June 17, but still coming in at 54%. So that's declining at 0.6 percentage points in one week.
And at the same time, new postings, i.e. postings that are on the site for seven days or less, those moved in the same direction but are still strong, 71.9% above their pre-pandemic baseline.
- So it sounds like, then, based off of those numbers, that we haven't seen an en masse taking down of these job postings which the Fed might prefer to see as it tries to get things back in balance.
So are you seeing, though, any green shoots that trend could change? Because it seems like those are some pretty large numbers that you're still observing right now.
ANN ELIZABETH KONKEL: So we continue to observe really strong employer demand. Since the beginning of the year, job postings have kind of slowly ticked down just a little bit, kind of week over week. But it has been a slow cooling. But there has not been any sort of sharp left turn or sharp downturn.
It is certainly something that we're watching and looking for. But at the same time, we see job seeker interest in in-person work returning. Because we, at Indeed, we have a unique position of being able to see the employer demand side of the equation, but also what job seekers are interested in.
And relative to the average job seeker interest in retail and food service, sectors that are in-person work, and throughout the crisis we have heard struggles to get workers in those sectors. Interest in those sectors is returning and warming up.
And so for employers in in-person sectors that is good news, and probably news that the Fed, who's watching the labor market overall, would probably smile upon as well.
- I was going to say. I mean, it seems like this is kind of an exciting time. You don't usually hear the Fed get so interested or excited about job postings which I imagine is kind of cool over at Indeed.
But I guess within the context of what we're seeing right now, the Fed is putting a lot of emphasis on the job vacancy rate. But there might be some behavioral components underneath job postings themselves that can make that measure a little bit noisy.
Not unreliable per se, but there might be situations where you have a small business that puts a posting up, and even though they're not hiring for it actively, they never end up taking it down.
Are there any nuances to the ways by which job postings either do or don't get deposted from the site, that maybe play into how one, like an economist, like J Powell, should read this measure?
ANN ELIZABETH KONKEL: So that is something that we've looked at, at Indeed Hiring Lab. But we are pretty confident in our metric. And that is also why we track a variety of different series.
We don't just track the overall job postings which is the stock. That's also why we look at new postings which is the flow. And the fact that they are moving in a similar direction, of this kind of slow cooling, slow ticking down, but in no way are plunging or anything like that. We are confident in this metric.
One thing that we are seeing a more substantial cooling is job postings for software development roles. I know that there have been a variety of announcements about either layoffs in the tech sector or hiring freezes. And there's been a bit of a panic about that. We are seeing some cooling in that area.
As of July 17, software development job postings have declined 7.1%, over the last four weeks. Within just the last week, have declined 2.1%. But at the same time, they are still 114% above their pre-pandemic baseline.
And overall, from a variety of metrics, the labor market looks strong. And so hopefully, if there is cooling in parts of the economy, workers can transition to a new job quickly.
- Yeah, and indeed, we've seen the-- no pun intended, sorry. But we've seen the tech sector with a lot of headlines, layoffs here, especially in the crypto side of things.
But how about some of the in focus sectors that we've been watching through the recovery and the rebound, which is in-person types of things, food and service and accommodation. Are those job postings also keeping that same trend? Or are you seeing something different?
ANN ELIZABETH KONKEL: So across the board, pretty much, actually all, sectors that we are tracking are above their pre-pandemic baseline but to varying degrees. At near the top of the list is the software development job postings, well above their pre-pandemic baseline.
Then in the middle, the economy average is around that 54%. And then below the economy average, food service has hovered below the economy average. Hospitality and tourism has hovered below that economy average, retail as well.
But at the same time, they have rebounded. Early in the pandemic, in April of 2020, it was a very dire situation. And we are just simply in a much, much different place now than in April of 2020.
- Ann Elizabeth Konkel, Indeed Hiring Lab Economists. Thanks so much for stopping by.
