There are growing signs that worker power – a consequence of the hot COVID-era economy – is stabilizing or even eroding in some sectors.
Why is this important: The extremely tight labor market has been great for workers, but a little too spicy for the Fed’s liking – Chairman Jerome Powell has cited it as an inflationary factor. Now there are signs that his rate hikes are having the intended chilling effect.
What they say : “It’s not that workers have lost power, it’s just that they’re not gaining it more and more,” says Nick Bunker, director of economic research at Indeed.
Details: There are still many more jobs on Indeed than there were before the pandemic began — a clear sign of high demand for workers — but assignments are falling back from last year’s highs.
- The tech sector, where we’ve seen the most layoffs over the past month, is seeing notable declines. Listings for “software developers” have dropped about 7% in the past four weeks, according to Bunker.
- People at the layoff tracking website noted 109 layoff events so far in June, down from 75 the previous month and just 17 in March.
Fear factor: You cannot ignore the role that psychology plays in the power equation. Employers fearing a recession are pulling assignments, Bloomberg wrote earlier this week. At the same time, workers are beginning to worry about job security, as we have reported.
And even: Don’t forget that the unemployment rate is still very low!
What to watch: If the quit rate starts to drop, says Bunker. So far it has remained relatively stable, a sign that workers are still feeling that leverage — confident enough to risk a new job.