US labour market shows signs of cooling, WSJ says

Demand for workers in the US may be cooling more quickly than some government statistics might lead you to believe, data from two staffing companies showed.

According to The Wall Street Journal, figures from ZipRecruiter, a large online recruiter, job postings in December were 26% above their pre-Covid levels and had continued to fall since.

That compared to 11m job openings available in December, as per the Department of Labor's Job Openings and Labor Turnover survey, which was below the 11.9m hit in March 2022 but 57% more than their pre-pandemic peak.

Figures from Recruit Holdings meanwhile, which was the parent company for US job-listing website Indeed, told a similar story.

Job listings on Indeed revealed a bigger decline than the government's figures, albeit not as large as ZipRecruiter.

Indeed's data also showed that firms were cutting back on paid job postings in particular.

Figures from the National Federation of Independent Business and LinkUp also showed sharper drops than the government data.

John Hilsenrath and Brian Mena at the WSJ also noted methodological differences between the JOLTS data and that from online recruiters, as the latter only tracked online listings whilst businesses could also hire by word-of-mouth, job fairs and help-wanted signs.

As well, the JOLTS survey canvassed 20,700 firms each month, whereas the non-farm payrolls figures were based on reporting from 122,000 companies and government agencies.

Furthermore, the JOLTS data was published with about a two-month lag.

Furthermore, the reliability of job openings estimates had declined in recent years because fewer businesses were responding to questions.

The response rate for the JOLTS survey had fallen from 56.4% in February 2020 to 30.6% in September 2022.

Economists at Goldman Sachs using private sector data estimated that job openings were somewhere nearer 9-10m and that the decline in unfilled jobs had helped to reduce pressure on salaries over recent months.

They also believed that the US economy could avoid a recession in 2022.