Will holiday hiring and wage hikes offset worries over tech company layoffs?
November was a chilly month for jobs, relatively speaking, of course.
Employers added only 263,000 new jobs. That was the slowest pace of hiring in almost two years. It’s important to note a month with 263,000 new jobs would have been considered a red hot number in the decade before the COVID-19 pandemic began in March 2020.
Companies slowed their appetite for hiring, while also announcing thousands more planned layoffs in
November, led by more than 52,000 layoffs by tech firms, according to Challenger, Gray and Christmas. That’s a 20-year high as a chill sets in for the technology sector.
December and January tend to be popular months to announce job cuts. Companies are rushing to make an annual budget or reshape one as a year begins.
The investment markets will take the temperature of the latest jobs data this week.
The job openings and labor turnover survey, better known by its verbinducing acronym JOLTS, will be released Wednesday. Like other readings on the job market, it is a lagging indicator. This week’s report will cover November, so it is far from a realtime read on labor demand. Nevertheless, the count of job openings and layoffs will give investors a sense of the job market’s resiliency.
Then on Friday, the December jobs report comes out. The employer data will be scrutinized for evidence of the recent spike in announced layoffs. That may be offset by holiday hiring, however, muddying the jobmarket picture for investors and the Federal Reserve.
Less hiring will feed recessionary worries. Still, no recession since the 1970s has started with the economy adding more than 200,000 jobs each month. Meantime, employee pay hikes have been sticky, averaging over 5% in 2022. That helps consumers battle 7% inflation, but also helps fuel 7% inflation.
This week’s jobs data won’t deter the Fed from continuing its inflation fight with higher interest rates. Yet, signs of tighter employer payrolls will prompt calls for a pause soon in rate hikes.
Tom Hudson is a financial journalist in Washington, D.C. He is chief content officer at WAMU public radio station.