The United States added 528,000 new jobs in July and the pace of employment in the second half of 2022 is expected to remain strong, economists and analysts said.
Job growth in July “significantly exceeded” the second-quarter average of just under 375,000 jobs added month-over-month, said Joel Berner, senior economic research analyst at Realtor. com.
“While runaway inflation and relative stock market weakness over the calendar year have Americans worried about their spending and savings, the economy continues to show a healthy pace of activity. job,” he said.
Strong employment growth in July
Amid fears of a looming recession, the United States hired 158.3 million people, reaching the level of the pre-pandemic peak in February 2020. The number of job openings remains stable at 11 million in the latest data release and the number of unemployed people is around 5.9 million, Berner said.
Job opportunities are “abundant” while the overall unemployment rate fell to 3.5% while the labor force participation rate remained stable at 62.1%, which is below the level of before the pandemic by 63.4%, he said.
The average hourly wage edged up $0.15 to $32.27 and the job market “continues to favor workers who are open to negotiating wage increases or seeking new positions,” Berner added. .
Industries that continued to hire in July were professional and business services, leisure and hospitality, and health care.
Hiring should be “strong” in the second half
The labor market is expected to remain strong in the second half of 2022, according to research by HR and business consultancy Robert Half.
The survey indicated that 46% of 1,500 managers plan to add new permanent positions in the second half of the year and 46% plan to hire for vacant positions and only 8% plan hiring freezes. or layoffs.
“Despite talk of an economic downturn, many companies remain in hiring mode and professionals with in-demand skills continue to have options,” said Paul McDonald, senior executive director of Robert Half. “In addition to filling critical positions, employers are increasingly turning to contract talent to stay nimble.”
The survey, conducted from June 17 to July 14 with responses from managers of companies with at least 20 employees, showed that 45% of managers plan to hire more contract professionals by the end of 2022, including 60% in technology and 54% in finance and finance. accounting. A significant group of employers, 72%, plan to hire more entry-level or early-career professionals.
Why employers hire
In addition to the current talent war in public accounting, as the pool of professionals is smaller, companies such as Weaver, a Houston-based accounting firm, have increased their revenue over the past two years, said John Mackel, CEO of Weaver, at TheStreet. .
The accounting firm plans to add 300 employees to its current workforce of 1,000 during its fiscal year, which began on June 1. Weaver will hire employees for associate through partner positions in its practice groups, including alternative investment, energy compliance, state and local taxation, public enterprise, risk and transaction advisory and securities practices. government council, he said.
“We hire people at all levels of service lines and locations to ensure we can meet our customers’ needs,” Mackel said.
The supply and demand imbalance in the labor market will continue to decline through the second half of the year, Jeanniey Walden, labor expert and chief innovation officer at DailyPay, a payments platform based in London, told TheStreet. New York. The JOLTS Job Openings and Labor Turnover report for August 2 showed job openings at 10.7 million in June, down by one million in just two months.
Scroll to continue
While employers will continue to hire, companies are more strategic in which departments and products to invest in, she said.
“You’ll see increased investment in revenue-generating roles and product development,” Walden said. “The job market for highly skilled talent remains high and competitive, but very selective.”
The “great retirement” in areas such as health care, education and first responders has created a huge gap in finding qualified employees in those particular fields, Walden said.
“Economic challenges lead to budget cuts, which limit the ability to replace permanent staff,” she said. “More and more private companies and public institutions will rely more on contract/economic self-employed workers to fill these gaps as the economy recovers.”
There continues to be “heavy spending” by companies on job postings, Emily Alvarez, vice president of New York-based Symphony Talent, a recruiting marketing technology company, told TheStreet.
“Employers will likely continue to hire in the second half of 2022 because they are catching up with the ‘big quit’, which was about people looking for something better, whether that means better pay, less stress, more flexibility or even serving a goal bigger than themselves,” she said.
The labor market is one of the tightest HR executives have “ever seen,” Alvarez said.
Employers are expected to continue hiring although the pace is expected to slow from the average monthly growth of nearly 400,000 jobs that has occurred since March, said Phillip Sprehe, economist at Geographic Solutions, an employment software company based in Palm Harbor, Florida at TheStreet.
Job increases will occur in hotels, airlines, restaurants and event venues as well as professional offices and commercial jobs, he said.
“The labor market may have enough momentum to withstand weak GDP numbers and interest rate hikes planned by the Federal Reserve to rein in inflation next year,” Sprehe said.
Consumers continue to shift from buying products online to more recreational activities, which will create jobs.
“This same shift in consumer behavior is poised to hurt manufacturing employment, as evidenced by the record annual increase in retail inventory of 17.5% in May,” he said. “Overall wages are expected to rise, but are unlikely to reach the rate of inflation before next year, which means wages in real terms are expected to fall in 2022.”
There are now nearly two job openings for every person actively looking for a job, Sprehe said.
“Any further additions to the workforce that result would still leave a gaping gap in the number of job vacancies,” he said. “The obvious speculation is that the pandemic may have structurally realigned the industry such that it has created a strong mismatch with the labor market.
Hiring continues for technical positions, including engineering and product positions, Dru Kirk, vice president of Marqeta, an Oakland, Calif.-based card company, told TheStreet. The company has 100 open positions and plans to add more this year.
“Amid news of layoffs and hiring freezes at other companies in the fintech and payments sectors, we are seeing additional interest in our vacancies,” she said.