Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. We will
Speaker 1: get our weekly read on the US labor market come
Speaker 1: Thursday with initial jobless claims, which have been trending higher,
Speaker 1: signaling cooler conditions in the US labor market. Although perspective here,
Speaker 1: folks still low by historical standards, and we need to
Speaker 1: surpass three hundred thousand to raise a red flag. So, Katie,
Speaker 1: the type labor market continues to really present struggles. We
Speaker 1: know this for many employers, absolutely, Uh. Struggles for employers,
Speaker 1: struggles for the feed as well. Jerome Pal himself has
Speaker 1: said that basically the rate of unemployment right now, it's unsustainable.
Speaker 1: All right, So let's talk about, UM, how tight this
Speaker 1: labor force is and how it is tricky for some employers.
Speaker 1: Julia Pollock is back with us. She's chief economists and
Speaker 1: ZIP recruiter UH, and she is with us on the
Speaker 1: phone from Los Angeles. Julia, nice to have you back
Speaker 1: with us. UM big picture. First of all, when it
Speaker 1: comes to the labor market, we recently had unbelievably strong
Speaker 1: monthly jobs report, a blockbuster. How are you seeing it
Speaker 1: from a macro big perspective. This is a very very
Speaker 1: strange moment in the labor market where you do see
Speaker 1: these enormous games and they're very very broad, broad broad games. Uh.
Speaker 1: And at the same time you see signs of an
Speaker 1: extremely tight label market. As you're saying, not just the
Speaker 1: record low um uh job was claimed and even though
Speaker 1: they're taking up slightly, but they're not feeding into continuing claims.
Speaker 1: We're seeing no pass throught. So people are not staying
Speaker 1: unemployment very long. They've being snapped up right away after
Speaker 1: they get laid off from their tech company and they're
Speaker 1: getting hired um so. So yes, unemployment is still coming down,
Speaker 1: and yet companies seem quite worried about the hossibility of
Speaker 1: the future downturn and they are hardening themselves against that possibility.
Speaker 1: And if you look at their future hiring plans, they
Speaker 1: do look a little bit more um concerned, and they
Speaker 1: hope that things will be able to turn back to
Speaker 1: normal and that they will be able to stop doing
Speaker 1: this a crazy amount of hiring that they're doing. So, Julia,
Speaker 1: employers worried about a future downturn? What about job seekers
Speaker 1: right now? So job seecret confidence is still holding remarkably steady.
Speaker 1: You know, if you look at all the different confidence surveys,
Speaker 1: CEO confidence has plummeted, home buyer confidence has plummeted, consumer
Speaker 1: confidence is very low. But job seecre confidence has been
Speaker 1: amazingly strong since the omicron surge passed. And and that's
Speaker 1: because job seekers have offers in their back pockets. They
Speaker 1: are holding out for better. Uh, they are convinced that
Speaker 1: if they resign from their current jobs, the current employers
Speaker 1: will asked them to stay and give them a raise
Speaker 1: um and and counter an outside offers. So they have
Speaker 1: an enormous amount of bargaining power and leverage. That said,
Speaker 1: they they're reading the news, they see all these headlines
Speaker 1: about layoffs, and so they are concerned as well. And
Speaker 1: in the last two months, our future expectations have kind
Speaker 1: of taken a those dive, and they're starting to worry
Speaker 1: that jobs may not be splentiful in the future. That's
Speaker 1: interesting too, because the okay, yeah, so you're talking about
Speaker 1: sentiments specifically, which is certainly something we know the FED
Speaker 1: watches keeps a watch on pretty closely in terms of
Speaker 1: what it might mean for future activity. So what's your
Speaker 1: net net takeaway I'm thinking about and I day in
Speaker 1: and day out, we're talking about the big macro issues
Speaker 1: that are facing investors. You know, recession and recession. Labor
Speaker 1: markets still strong, how long does it continue? Consumers you know,
Speaker 1: spending how long will they continue? UM job market, So
Speaker 1: what's the takeaway, the big picture takeaway that that you
Speaker 1: would tell our audience right now and the implications of it. Yeah, yeah,
Speaker 1: So inside most companies, uh there, this is still an
Speaker 1: incredibly tight light market and hiring is still hugely challenging.
Speaker 1: Most companies are still seeing about twenty three percent more
Speaker 1: employees quick each month and they did in twenty nineteen.
Speaker 1: And most companies are still doing about twelve percent more
Speaker 1: hiring each month than they did in twenty nineteen, just
Speaker 1: to kind of tread water because it's so much turn
Speaker 1: and so so many quick. I think it's understandable that
Speaker 1: companies are kind of nostalgic for the good old days
Speaker 1: when everything was slower, when there was less turnover in turn,
Speaker 1: when it wasn't so difficult to hire um, when they
Speaker 1: could still insist on on basic skind of standards, and
Speaker 1: you know that they could have a rule that one
Speaker 1: strike rule and you're out if you missed work without notice.
Speaker 1: H that's more like a ten strike rule and you're out.
Speaker 1: Uh rule now because companies cannot afford to lay people
Speaker 1: off because they know that they can't replace them well.
Speaker 1: And people would argue on the other side that right,
Speaker 1: workers are finally kind of getting their day after years
Speaker 1: and years of pressure and wages staying down and even
Speaker 1: on an inflationary you know, basis, um, wages are not
Speaker 1: necessarily keeping up with inflation in a lot of different industries. UM.
Speaker 1: But I do wonder, then, is another net takeaway as
Speaker 1: we spend so much time talking about the macro issue
Speaker 1: of inflation, which is certainly front and center and probably
Speaker 1: the number one thing on the Fed's mind. Not probably,
Speaker 1: it is so still tight labor market versus what we're
Speaker 1: seeing in t Does that mean wage pressures are sticking
Speaker 1: around longer? Yes, that is exactly I think the takeaway
Speaker 1: from this most recent jobs report that perhaps the risk
Speaker 1: of a recession who has gone down a little bit,
Speaker 1: but the risk of persistent inflation is still very much there.
Speaker 1: And and that is the big question. You know, how
Speaker 1: much cold water will the said have to throw on
Speaker 1: this economy. It looks as though, for you, for now,
Speaker 1: the labor market is pretty resilient and it's able to
Speaker 1: withstand neutral interest rates. But could it withstand much higher
Speaker 1: interest rates? That's the big question, and I think that's
Speaker 1: why you see some sort of cautious optimism on spend
Speaker 1: some parts of the market, and even some um some
Speaker 1: sort of gloom and doom in others, like in those
Speaker 1: manufacturing numbers that came up to be all right. Gonna
Speaker 1: leave it on that note, Tilia, Thank you. Julia Pollock,
Speaker 1: chief economists and ZIP recruiter joining us on the phone
Speaker 1: from Los Angeles. Any thoughts there. I just that last
Speaker 1: point you made that it feels like workers are finally
Speaker 1: having their day. I just hope that remains. Obviously that's
Speaker 1: a huge product of the labor shortage, but I hope
Speaker 1: that momentum sticks around. Right, we were finally starting to
Speaker 1: see especially at the lower end um I want to say,
Speaker 1: pre pandemic, and then you know, there were certainly pressures
Speaker 1: there