US job market: A comprehensive look at layoffs, hiring trends

Major US companies are at it again, initiating more rounds of layoffs even after reducing headcounts in the first quarter of 2024. Indeed Hiring Lab Economist Cory Stahle joins Yahoo Finance to break down the impact of job cuts from early 2024, the state of the US labor market as Americans continue to apply for jobs through employment sites, and what workers can do to revamp their resumes and skillsets.

"What we're seeing is that the overall layoff rate has still remained pretty low. Now, with that being said, obviously if you're on the receiving end of the layoff... it's going to hit very, very different," Stahle says. "But right now, the overall labor market is still stable, is still strong. We've got initial claims data today on unemployment claims that showed that things were pretty stable. They were flat and unchanged from last week... so there are still some signs that the labor market is stable [and] steady, despite what we have seen in recent layoffs."

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This post was written by Luke Carberry Mogan.

Video Transcript

BRAD SMITH: The job market is hot. Hundreds of thousands of jobs are being added to the economy every month. But at the same time layoffs continuing to sweep the US, hitting almost every sector this year. Just this week, Morgan Stanley take-two and Tesla announced job cuts. And with more than a year of ongoing cuts, workers are starting to feel the pressure of holding on to their jobs. For more on this, I'm joined by Cory Stahle. Who is the Indeed hiring lab economist. Great to have you on the program here. I mean, you guys have a trove of data as it relates to the number of jobs that are listed.

But now we're talking about something on the other side as well. And some of the positions that get cut and perhaps cycled into some of the new build out efforts or scaling efforts that some companies may have. Just broad strokes to start things off, what are you seeing in the data?

CORY STAHLE: Overall, what we're seeing the data, we've definitely heard a lot about these layoffs. What's interesting, though, is right now these layoffs are still more in the news rather than in the full data set. What we're seeing is that the overall layoff rate has still remained pretty low. Now with that being said, obviously if you're on the receiving end of a layoff, it's going to hit very different and we're going to have to really watch to see if it becomes more of a trend. But right now the overall labor market is still stable. It's still strong.

We got initial claims data today on unemployment claims that showed that things were pretty stable. They were flat and unchanged from last week. So there are still some signs that the labor market is stable, steady despite what we've seen in some of these recent layoffs.

BRAD SMITH: And we're going to get to some actionable tips for people who have been impacted as well here. I wonder and we continue to hear this word, reskilling tossed around especially as it relates to some of the new advancements in technology. How much of that are you seeing as it relates to the positions that are trimmed and then relisted as a different type or with different qualifications for a company that's still doing some hiring?

CORY STAHLE: It's always hard to tell exactly what's going on in some of these layoffs. A lot of this ends up being companies taking a job, cutting it here and maybe hiring or moving resources around into other areas. And a lot of that information happens on the company level. And that's not something that we always have visibility into. But one of the things we can see as we look at, indeed data, we look at job posting data. We can see that there are some clear trends and some clear patterns.

For instance, if we look at software development jobs, there's been a really clear pullback far beyond average where we've seen much less demand for employers posting jobs for software developers. But on the other side of the coin, we've also seen a pretty big and pretty consistent, steady hiring for jobs in health care for jobs in construction, manufacturing, some areas that have been surprising given the current interest rate environment that we're in.

BRAD SMITH: What are you seeing in terms of moderation in wages right now?

CORY STAHLE: In terms of wages, what we see it through and we can see the overall obvious government data. We've seen from the government data that there's been some slowing in wages from the Bureau of Labor statistics. But what's interesting is within indeed data. We can also look at the wages that are being advertised in job postings. So this is before anybody is even hired before they've accepted the job. What are new people being hired at and what we've seen on indeed data is a pretty consistent decline that was in March that number was down to about 3.1% wage growth.

Which is in line with what we saw before the pandemic. So again steady decrease in wages and back to about where we were in 2019.

BRAD SMITH: Wanting to get back to the actionable tips here. I mean, we started off this conversation talking about or teeing up the conversation with some of the layoffs that had taken place. Morgan Stanley, take-two interactive, Tesla. For those that find themselves on the bad end of some of these corporate cuts, what can they do next? What are some actionable tips that they can put into effect in order to get that new position?

CORY STAHLE: I think the first step is to really just take a deep breath and just step back. Whenever we have these big adjustments, these big changes, individuals, it can be really hard to get that big perspective. So I'd say take a step back, take a deep breath, the big perspective right now again is where we talked about that ultimately there are-- we've seen these layoffs picking up. But by and large there are still more opportunities available now than there were even before the pandemic.

So if we look at job postings on indeed, right now there's still almost 17% more job postings than there were before the pandemic. So there are still opportunities out there. One of the things I would add, though as a caveat to that is as we start to look at different sectors and different industries. It's not always the same opportunity, I mentioned that software development has definitely pulled back a lot more. We've seen other tech areas like information design has pulled back, marketing media and communications.

But there are areas where, for employer demand still remains really hot. So for those people who have maybe they're thinking about reskilling, maybe going toward something else. Looking at a career change might be an option at this time. And if you're not looking for a career change, that's fine too. Looking to maybe upskill and focus on those human skills. Some of the new hot technologies like generative AI is another potential area that you can look at for potential skilling up opportunities to really set yourself apart in a labor market where it's become a little trickier in some sectors.

BRAD SMITH: Cory, I only got about 30 seconds left here. I want to end on a fun note. To what extent have you seen any data or any success stories come through about people who are using generative AI to write their cover letter or to rejigger perhaps their resume?

CORY STAHLE: So without diving into any specific, we've definitely seen a lot of great use cases for generative AI. And people being able to take their resume and match it up with a job description. And be able to look at the skills difference between those and help-- have generative AI effectively help them to identify areas and gaps in ways that they can improve. And so there are a lot of creative things seekers can do with these types of technologies that can really help them to give them a little bit of a leg up when they're looking for jobs.

BRAD SMITH: All right. That a little bit of a bonus tip there. Cory, thanks so much for taking the time here today. Cory Stahle, who is the indeed hiring lab economist. Thanks so much for taking the time.

CORY STAHLE: Thanks for having me.