”The labor market is poised for a summer slowdown as businesses put hiring plans on hold but refrain from broad-based layoffs,” Gregory Daco, chief economist at EY-Parthenon wrote in a commentary this week. ”We see job growth slowing well below trend in the coming months.”
Still, most American workers enjoy an unusual level of job security. The unemployment rate is low at 4.1%. The number of Americans applying for unemployment benefits — a proxy for layoffs — remains at healthy levels.
But Adam Schickling, senior economist at Vanguard, cautions that ”a low unemployment rate and a muted pace of layoffs mask underlying weakness.”
In a commentary Tuesday, Schickling wrote that the health of the job market ”can be a matter of individual perspective…If you’re a registered nurse, you may believe the job market’s health to be excellent. The unemployment rate for experienced health care practitioners is currently below 2%. If you’re young and just entering the labor force or you’re older and seeking to reenter it, prospects may seem bleak.”
The rate of people quitting their jobs — a sign they’re confident they can land something better — has fallen from the record heights of 2021 and 2022 and is now below where it stood before the pandemic.
For one thing, hiring has become concentrated in a handful of industries. So far this year, for example, private U.S. employers have added 644,000 jobs. Of those, nearly 405,000 — or 63% — were in just one of the Labor Department’s industry categories: healthcare and social assistance, which spans everything from hospitals to daycare centers.