WEBVTT - Job Seeker Confidence Remains Strong Post Omicron

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Messer and

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<v Speaker 1>Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. We will

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<v Speaker 1>get our weekly read on the US labor market come

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<v Speaker 1>Thursday with initial jobless claims, which have been trending higher,

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<v Speaker 1>signaling cooler conditions in the US labor market. Although perspective here,

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<v Speaker 1>folks still low by historical standards, and we need to

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<v Speaker 1>surpass three hundred thousand to raise a red flag. So, Katie,

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<v Speaker 1>the type labor market continues to really present struggles. We

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<v Speaker 1>know this for many employers, absolutely, Uh. Struggles for employers,

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<v Speaker 1>struggles for the feed as well. Jerome Pal himself has

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<v Speaker 1>said that basically the rate of unemployment right now, it's unsustainable.

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<v Speaker 1>All right, So let's talk about, UM, how tight this

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<v Speaker 1>labor force is and how it is tricky for some employers.

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<v Speaker 1>Julia Pollock is back with us. She's chief economists and

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<v Speaker 1>ZIP recruiter UH, and she is with us on the

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<v Speaker 1>phone from Los Angeles. Julia, nice to have you back

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<v Speaker 1>with us. UM big picture. First of all, when it

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<v Speaker 1>comes to the labor market, we recently had unbelievably strong

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<v Speaker 1>monthly jobs report, a blockbuster. How are you seeing it

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<v Speaker 1>from a macro big perspective. This is a very very

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<v Speaker 1>strange moment in the labor market where you do see

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<v Speaker 1>these enormous games and they're very very broad, broad broad games. Uh.

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<v Speaker 1>And at the same time you see signs of an

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<v Speaker 1>extremely tight label market. As you're saying, not just the

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<v Speaker 1>record low um uh job was claimed and even though

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<v Speaker 1>they're taking up slightly, but they're not feeding into continuing claims.

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<v Speaker 1>We're seeing no pass throught. So people are not staying

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<v Speaker 1>unemployment very long. They've being snapped up right away after

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<v Speaker 1>they get laid off from their tech company and they're

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<v Speaker 1>getting hired um so. So yes, unemployment is still coming down,

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<v Speaker 1>and yet companies seem quite worried about the hossibility of

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<v Speaker 1>the future downturn and they are hardening themselves against that possibility.

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<v Speaker 1>And if you look at their future hiring plans, they

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<v Speaker 1>do look a little bit more um concerned, and they

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<v Speaker 1>hope that things will be able to turn back to

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<v Speaker 1>normal and that they will be able to stop doing

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<v Speaker 1>this a crazy amount of hiring that they're doing. So, Julia,

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<v Speaker 1>employers worried about a future downturn? What about job seekers

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<v Speaker 1>right now? So job seecret confidence is still holding remarkably steady.

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<v Speaker 1>You know, if you look at all the different confidence surveys,

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<v Speaker 1>CEO confidence has plummeted, home buyer confidence has plummeted, consumer

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<v Speaker 1>confidence is very low. But job seecre confidence has been

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<v Speaker 1>amazingly strong since the omicron surge passed. And and that's

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<v Speaker 1>because job seekers have offers in their back pockets. They

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<v Speaker 1>are holding out for better. Uh, they are convinced that

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<v Speaker 1>if they resign from their current jobs, the current employers

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<v Speaker 1>will asked them to stay and give them a raise

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<v Speaker 1>um and and counter an outside offers. So they have

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<v Speaker 1>an enormous amount of bargaining power and leverage. That said,

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<v Speaker 1>they they're reading the news, they see all these headlines

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<v Speaker 1>about layoffs, and so they are concerned as well. And

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<v Speaker 1>in the last two months, our future expectations have kind

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<v Speaker 1>of taken a those dive, and they're starting to worry

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<v Speaker 1>that jobs may not be splentiful in the future. That's

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<v Speaker 1>interesting too, because the okay, yeah, so you're talking about

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<v Speaker 1>sentiments specifically, which is certainly something we know the FED

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<v Speaker 1>watches keeps a watch on pretty closely in terms of

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<v Speaker 1>what it might mean for future activity. So what's your

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<v Speaker 1>net net takeaway I'm thinking about and I day in

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<v Speaker 1>and day out, we're talking about the big macro issues

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<v Speaker 1>that are facing investors. You know, recession and recession. Labor

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<v Speaker 1>markets still strong, how long does it continue? Consumers you know,

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<v Speaker 1>spending how long will they continue? UM job market, So

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<v Speaker 1>what's the takeaway, the big picture takeaway that that you

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<v Speaker 1>would tell our audience right now and the implications of it. Yeah, yeah,

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<v Speaker 1>So inside most companies, uh there, this is still an

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<v Speaker 1>incredibly tight light market and hiring is still hugely challenging.

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<v Speaker 1>Most companies are still seeing about twenty three percent more

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<v Speaker 1>employees quick each month and they did in twenty nineteen.

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<v Speaker 1>And most companies are still doing about twelve percent more

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<v Speaker 1>hiring each month than they did in twenty nineteen, just

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<v Speaker 1>to kind of tread water because it's so much turn

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<v Speaker 1>and so so many quick. I think it's understandable that

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<v Speaker 1>companies are kind of nostalgic for the good old days

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<v Speaker 1>when everything was slower, when there was less turnover in turn,

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<v Speaker 1>when it wasn't so difficult to hire um, when they

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<v Speaker 1>could still insist on on basic skind of standards, and

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<v Speaker 1>you know that they could have a rule that one

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<v Speaker 1>strike rule and you're out if you missed work without notice.

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<v Speaker 1>H that's more like a ten strike rule and you're out.

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<v Speaker 1>Uh rule now because companies cannot afford to lay people

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<v Speaker 1>off because they know that they can't replace them well.

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<v Speaker 1>And people would argue on the other side that right,

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<v Speaker 1>workers are finally kind of getting their day after years

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<v Speaker 1>and years of pressure and wages staying down and even

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<v Speaker 1>on an inflationary you know, basis, um, wages are not

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<v Speaker 1>necessarily keeping up with inflation in a lot of different industries. UM.

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<v Speaker 1>But I do wonder, then, is another net takeaway as

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<v Speaker 1>we spend so much time talking about the macro issue

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<v Speaker 1>of inflation, which is certainly front and center and probably

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<v Speaker 1>the number one thing on the Fed's mind. Not probably,

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<v Speaker 1>it is so still tight labor market versus what we're

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<v Speaker 1>seeing in t Does that mean wage pressures are sticking

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<v Speaker 1>around longer? Yes, that is exactly I think the takeaway

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<v Speaker 1>from this most recent jobs report that perhaps the risk

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<v Speaker 1>of a recession who has gone down a little bit,

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<v Speaker 1>but the risk of persistent inflation is still very much there.

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<v Speaker 1>And and that is the big question. You know, how

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<v Speaker 1>much cold water will the said have to throw on

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<v Speaker 1>this economy. It looks as though, for you, for now,

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<v Speaker 1>the labor market is pretty resilient and it's able to

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<v Speaker 1>withstand neutral interest rates. But could it withstand much higher

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<v Speaker 1>interest rates? That's the big question, and I think that's

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<v Speaker 1>why you see some sort of cautious optimism on spend

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<v Speaker 1>some parts of the market, and even some um some

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<v Speaker 1>sort of gloom and doom in others, like in those

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<v Speaker 1>manufacturing numbers that came up to be all right. Gonna

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<v Speaker 1>leave it on that note, Tilia, Thank you. Julia Pollock,

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<v Speaker 1>chief economists and ZIP recruiter joining us on the phone

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<v Speaker 1>from Los Angeles. Any thoughts there. I just that last

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<v Speaker 1>point you made that it feels like workers are finally

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<v Speaker 1>having their day. I just hope that remains. Obviously that's

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<v Speaker 1>a huge product of the labor shortage, but I hope

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<v Speaker 1>that momentum sticks around. Right, we were finally starting to

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<v Speaker 1>see especially at the lower end um I want to say,

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<v Speaker 1>pre pandemic, and then you know, there were certainly pressures

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<v Speaker 1>there