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January 2023 Global Labor Market Update

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  • The US labor market is showing signs of softening as job openings decreased from 10.5 to 10.4 million over October to November
  • There were 4.7 million more US job openings than workers available, while labor market tightness measures, such as job openings to job seekers, continue to remain elevated
  • US wages remain below inflation as annual nominal wage growth is 4.6% compared to annual inflation which is at 6.5%
  • Job candidates in Brazil reported the largest percentage of those ready to make a change today in terms of finding a new job, followed by candidates in the US and Canada
  • Job candidates across the world are motivated by the opportunity to learn, with the highest percentages reported in Singapore and India

US labor market remains relatively tight despite relatively high job opening levels

US job openings decreased from 10.5 to 10.4 million over October to November, a decrease of 0.5% MoM, however an increase of 1.7% over the past three months is indicative of a gradually cooling labor market that remains relatively tight despite concerns over a looming US recession. There were 4.7 million more job openings than workers available, a slight increase from the previous month of 4.5 million.

US labor market tightness measure remains elevated

The job openings to job seekers ratio, which is one of the measures to assess the labor market tightness, continues to remain elevated at 1.7 compared to the pre-pandemic level of 1.2. The ratio of job openings to job seekers has increased by 41.7% since pre-pandemic days.

US job gains remain elevated  

Total nonfarm payroll increased by 223,000 over November to December reaching 153.7 million, surpassing the 2019 average of 150,984. Employment gains were up in leisure & hospitality (+67K) and education & health services (+78K), however down in professional and business services (-6K).

Overall, the gains in jobs signal a relatively stable labor market, as total nonfarm payroll has increased by 1.1% since the pre-pandemic days.

Globally job candidates have different timelines for finding new jobs

Radancy’s network of data shows that as of December 2022, candidates in Brazil reported the largest percentage of those ready to make a change today in terms of finding a new job, followed by candidates in the US and Canada. Candidates in European countries such as the Netherlands, UK and Germany reported that they are looking at new opportunities within the next few months and in the next year. Job candidates are considering various factors when considering employment opportunities such as compensation, convenience, career advancement, interesting or challenging work, good people to work with and work with purpose.  

US separations increase MoM while quits decrease and layoffs increase   

Total separations – the summation of quits, layoffs/discharges and other separations increased by 2.0% from October to November indicative of a cooling labor market. Overall, layoffs/discharges decreased over the past three months and MoM by 9.4% and 6.6% respectively. In terms of industry layoffs/discharges, financial activities experienced the largest increase in the past three months and MoM.

Reasons for not working

The US Census Bureau’s most recent release of the Household Pulse Survey Data covering the time from December 9, 2022 to December 19, 2022 surveyed Americans on several issues, including employment and reasons why they were not working. Of the almost 94 million Americans surveyed, the top three reasons for not working outside of retirement (41 million), other reasons (15.1 million) and did not report a reason (5.6 million) include being sick or disabled (10.9 million), individuals not wanting to be employed at the time of the survey (4.5 million) and caregiving for children not in school or daycare (4.7 million).

Real time data shows that job candidates globally are motivated the most by the opportunity to learn  

Radancy’s network of data as of December 2022 shows that job candidates across the world are motivated by the opportunity to learn with the highest percentages in Singapore and India compared to the US which reported the lowest percentage among the selected countries. The ability to positively impact peoples’ lives was more popular with candidates in the UK and the US compared to candidates in India and Singapore. Maintaining good professional relationships was equally valuable to candidates in Germany and the Netherlands in comparison to candidates in France who reported the lowest percentage.

US blue-collared industries experience a higher percent change in quits compared to white-collared industries

The percent change in quits remain higher for US blue-collared industries compared to white-collared industries from February 2020 vs. November 2022, suggesting that many frontline positions tend to remain in blue-collared industries that experienced the greatest challenges during the beginning of the pandemic and continue to experience attrition due to worker fatigue and long-term COVID-19 concerns. Similarly, the percentage change in average hourly earnings was higher for blue-collared industries overall in comparison to white-collared industries for the same period as businesses struggled to hire for hard-to-fill positions in industries with challenging working conditions and less remote roles.

US wages continue to remain below inflation

Over the past three months, wholesale trade experienced the largest gain in average hourly earnings, however it also experienced the largest decrease in average hourly earnings. Overall, wages remain below inflation as annual nominal wage growth is 4.6% compared to annual inflation, which is at 6.5%.

About Sarah Ali

Dr. Sarah Ali is the Global Economist at Radancy, a talent acquisition platform provider for the world's largest employers. Dr. Ali serves as the thought leader for Radancy's perspective on the global labor market, its implications for recruitment, retention, compensation, and the future of work. Dr. Ali champions the belief that transformative economic solutions can spark change and shape the future global growth. Dr. Ali holds a BSBA in Economics, Summa Cum Laude, as well as a Master's and PhD from the University of Missouri-Columbia. In her free time, she is an avid fitness enthusiast, and can frequently be found practicing yoga or traveling. Dr. Ali is dedicated to promoting optimism, economics, and global growth, and believes in the power of transformative economic solutions that will create a better future for all.

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