LinkedIn’s recent report, State of the Labor Market, indicates a drop in hiring on the platform by 23% year-over-year in the United States in January. The report also showed a decrease in the number of vacancies and a rise in posts mentioning “layoff” or “retrenchment” on the platform. This indicates a cooling of the labor market, according to Rand Ghayad, head of economics and global labor markets at LinkedIn.
In contrast, the Bureau of Labor Statistics’ monthly employment summary shows that the majority of new jobs added to the U.S. economy in January were in leisure and hospitality, with the service sector contributing 397,000 new jobs. The number of people employed part-time for economic reasons was 4.1 million.
The LinkedIn report conflicts with the U.S. jobs report, which indicates a booming labor market. However, the U.S. jobs report largely counts part-time jobs, which do not include health benefits, insurance coverage, and paid time off, and the majority of these new roles are in the services industry. The divergence between the two reports shows that the labor market looks like it’s booming in certain sectors but is cooling in others.
The JOLTS report, which measures job openings, shows an increase in the number of job openings to 11 million. The report indicates that as of January 21, 18.4% of employed U.S. adults and 20.1% of prime-age employed U.S. adults said they were actively applying for new positions. The report also shows that job-search activity has cooled off in some industries, such as tech and finance, while workers in industries like retail, where the job market remains hot, are still looking to make a move.
Ghayad does not predict an outright recession but expects the economy to slow further in 2023, with inflation likely to moderate as labor markets soften and wage pressures abate. The divergence between the LinkedIn report and the U.S. jobs report highlights the need for a more nuanced understanding of the labor market and the types of jobs being created.
