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Jobs market: U.S. workers ‘in advantageous position,’ expert says

Indeed Economic Research Director for North America Nick Bunker joins Yahoo Finance Live to discuss April JOLTS report data, job growth, and the outlook for the U.S. labor market.

Video Transcript

BRIAN CHEUNG: Well we're, of course, going to start with job openings, which we got data for this morning. The numbers for April showing a drop in the amount of job openings, from 11.9 million in March to 11.4. That's still vastly outnumbered the available workers in the United States.

Joining us to break down what this strong labor demand means for the economy is Indeed.com's head of research. That is Nick Bunker. Nick, great to have you on the program today. It's been a while since we spoke, but obviously, the data coming in this morning showing a very interesting dynamic. Although, not a sharp drop in the number of job openings. In your assessment, how tight does the labor market look as of this report?

NICK BUNKER: Thanks for having me on, Brian. So I think the labor market continues to be very tight. Mentioned that there was that drop in job openings, but if you look at that ratio of job openings to unemployed workers, we're at about 1.9, which is far above what we're seeing before the pandemic. And while there are some signs that maybe the labor market is cooling off a little bit, the temperature is still really high. So I think workers are in an advantageous position, and it doesn't seem like that's going to change anytime soon.

- Nick, you've pointed to, in your most recent study or your research, that remote work is still a big part of the search right now, for those workers who are looking for jobs. But you're finding increasingly that people are willing to go back to work, work in person. And I wonder what you think that shift points to. From an employer standpoint, what does that mean?

NICK BUNKER: Yeah. So what we've seen on Indeed is that relative job seeker interest in some of the positions that tend to be more in person, it's picked up recently, and it's sort of back in line with what we saw before the pandemic. And I think that lines up with a lot of what we're seeing in official government data. That looks like some of the hiring constraints and tightness in some of the markets, in industries like leisure and hospitality or retail, they're starting to ease a little bit.

You saw that in today's JOLTS reports too, that the quits rate for people in bars and restaurants and hotels, that's starting to come down a little bit. So it does suggest from an employer point of view that some of the difficulties that they were experiencing, say last summer, last fall, they're easing a little bit, even if they're still elevated to where they were say back in 2019.

- Is there anything to be gleaned from the layoffs rate coming in at 0.8%? That's a series low, as I understand it, for as far as the BLS has been collecting this data. Does that tell you anything about just the settling in terms of the turnover at these companies, which is relatively high through this recovery?

NICK BUNKER: Yeah. So I think that really shows that, while turnover has been high, been really concentrated in that sort of voluntary turnover, which is the quits. What we're seeing now is that sort of job security for workers is quite high, and that employers are really loathe to let workers go. We're at a serious low. So over 20 years, the lowest layoff rate we've seen in the US labor market.

So we think that what that suggests is-- now, mind you, this data only goes through the end of April-- that some of these concerns about economy-wide layoffs are maybe a little bit overblown. Sure. There are some sectors, particularly tech, where maybe layoffs have picked up, but broadly, workers are less likely to get layoff now than they have in over two decades. So that's a really advantageous situation right now, when it comes to that part of the labor market.

- Nick, I'm not sure if Jay Powell is watching this program right now, but what's been really interesting is it's kind of been your Super Bowl, the fact that he's been referencing so heavily in assessments of the labor market the vacancy rate. Because I guess the idea here is that the Fed perhaps can start to tighten policy without affecting the unemployment rate, simply by just removing the amount of job postings that there are out there. Was there anything in this report between March and April that tells you that first rate hike, which would have been reflected here, is starting to do exactly that?

NICK BUNKER: So I think, you know, it's one month of data, but it is sort of reflecting sort of what the Fed would want to see moving forward. There is some cooling in demand, but it's coming mostly from employers' desire to add new workers, rather than letting workers go. And I think that's, if we're going to see the soft-ish landing that Chair Powell and the rest of the FOMC wants to see, we're going to have to see if that's driven mostly by a pullback and people getting hired, or really a sort of decline in job openings rather than layoffs.

And so I think the metric to look forward to over the next few months is sort of layoff rates, rates at which people are sort of leaving the workforce. I think that's really going to be indicative in the next period of time, to see if Fed policy is doing what policymakers want it to do.

- And Nick, you certainly have a good pulse on what it is or I guess the mindset of workers who are still looking for jobs right now. And I know for so long, we've been talking about how it is really more about flexibility than pay. Although, you could argue, it's a little bit of both. I mean, what are you seeing in your data right now in terms of those who are still looking for jobs, what it is that they're trying to prioritize?

NICK BUNKER: So as you mentioned, flexibility has increasingly become something that people are interested in. And one way that we can see this in our data is flexibility in the form of remote work, whether that's just hybrid, going into the office a few days a week, or fully remote. Searches for terms related to remote or flexible work on Indeed are up significantly from where they were prior to the pandemic, over three times the rate.

But the fact is that many workers are unlikely to work in jobs that can be done remotely, just because so many jobs require face to face interaction with people. So for those workers, I think what you can see is that sort of there's desirability around flexibility of hours or maybe even consistency of hours, to make sure that there's some stability in their schedule, or even just making sure that they get a full week of work. So I think there's multiple angles which job seekers are trying to take advantage of the tight labor market, when it comes to their schedule.