When Will the Waves of Layoffs Loosen this Crazy Labor Market?

Starting now (just a little bit).

Designed by Wolf Richter for WOLF STREET.

There are countless layoff announcements, some of them from big tech and social media companies, others from money-losing companies that suddenly have to save money – like BuzzFeed did in the beginning this week to lay off 12% of its workforce, or today. through penny-stock food delivery Blue Apron to lay off 10% of its workforce. Many of the announced layoffs are in the hundreds. Some are bigger, like Meta with 11,000; and Twitter, an absolute mess of firing, quitting, and begging to come back. But they are still small compared to the 153.5 million workers in the United States.

But there are still many openings for historical work. While some tech and social media companies are laying off workers, industrial companies, automakers (they’re investing heavily in building the EV segment), and others are scrambling to hire tech workers. .

Ford, for example, is cutting staff in its legacy division, where sales are falling, but hiring tech and engineering talent in its EV division, where sales are booming and where it has to start all over again. start-up, including design and construction. automotive, software, supply chain, business, etc. These companies were starved of tech talent because they couldn’t compete with the rich pay packages and stock options offered by the likes of Twitter or Meta. But now they can attract talent.

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The US company’s announcement is a global layoff, and some of these layoffs affect workers in other countries. For example, Twitter’s number of dismissals included its dismissal from India, which destroyed its office. Twitter has also canceled thousands of operators, many of them in other countries.

There are also H-1B visa holders. Technology and social media companies, and other companies with technology divisions, often employ people from other countries in the United States on H-1B visas. And the eviction notice includes them. But those people only have 60 days to find another employer after their current job ends. If they cannot, they are considered “without status” and in theory must leave the United States.

When H-1B visa workers are fired, they do not receive unemployment benefits in the United States, and therefore do not appear on the unemployment insurance claims that we will review.

And when they leave the country, they no longer show up as “unemployed” on the monthly labor report.

That’s one of the reasons the Labor Department’s weekly unemployment insurance claims haven’t seen a big increase.

But the trend has changedbecause “continuing claims” (unemployment insurance claims by people who haven’t found a job at least one week after the first claim) are now on the rise, though historically low.

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Initial claim for unemployment insurance: 230,000 people filed initial claims for unemployment insurance at state unemployment offices in the week through Saturday, the Labor Department said today . This was in the same low range as last week (up a little last week, down a little last week) and in the same low range as before. Epidemic:

A long look at initial unemployment insurance claims shows that they are still low. To soften the labor market, we must see the number of initial jobless claims rise above the 300,000 mark. When the recession occurred (purple column), the number of first claims per week increased to 350,000.

This shows that most people who were laid off found work too quickly or already have a new job waiting in the wings, so they don’t need to file for unemployment benefits.

However, it is more difficult for some people to find a new job today. The number of people still claiming unemployment insurance at least a week after their first claim – people who haven’t found another job – has risen to 1.67 million, the Labor Department said today.

That’s still historically low, right around pre-pandemic lows, and lower than anything since the mid-1970s (when fewer people were working).

But it shows that the trend has completely reversed, that some people are struggling to find new jobs, and are staying longer on unemployment insurance. This is a sign that the labor market is weakening a bit:

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Here’s a quick look:

The long view shows a historical low of 1.67 million continuous claims. But it also shows that the current trend is increasing, which has completely reversed. During the mild recession of 2001, these ongoing claims rose to 3.7 million. During the Great Recession, they jumped to 6.6 million.

We saw other signs that the labor market is softening a bit, but remains tight. Weekly unemployment insurance claims are the most timely data we have. And they show a job market that’s still very tight, given all the layoff announcements, but it’s starting to loosen up a little bit where some of the people who are losing their jobs — and they may not be tech workers — need to look are less likely to find a new job and stay on unemployment insurance longer.

To stick with the “soft” analogy, the job market has never bottomed out, but it’s leveling off a bit.

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