The number of Americans applying for unemployment benefits fell last week as layoffs remain at healthy levels despite elevated interest rates and inflation.
The Labor Department reported Thursday that jobless claims for the week ending June 22 fell by 6,000 to 233,000 from 239,000 the previous week.
However, the total number of Americans collecting unemployment benefits rose for the eighth straight week, to 1.84 million, for the week of June 15.
The four-week average of claims, which softens some of the week-to-week volatility, rose by 3,000 to 236,000.
Weekly unemployment claims — a proxy for layoffs — remain at low levels by historical standards, a sign that most Americans enjoy unusual job security. Still, after mostly staying below 220,000 this year, weekly claims have moved up recently.
Lana Zak reports on President Biden’s speech on democracy and freedom in France, new data from the Labor Department that shows a hotter than expected jobs report, and what you need to know about the giant Joro spiders expected to make an appearance on the East Coast this summer.
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Alex Milyard (left) checks on recently poured concrete on the top of an I-70 tunnel in Elyria Swansea that will soon become a park. July 8, 2022.
Kevin J. Beaty/Denverite
The economic think tank Ludwig Institute for Shared Economic Prosperity made a claim that may surprise people struggling to afford life in Denver: “The Denver region was ranked as the national leader for living wage jobs.”
That 4% unemployment rate makes it look like the Denver economy is rosy. In reality, evictions are up, and affordability is one of the dominant issues on the minds of the locals Denverite speaks with each month.
Ludwig’s number attempts to better represent working people’s struggles. The institute argues that the U.S. Bureau of Labor Statistics data overstates how well certain regions are doing based on the number of people who have jobs — even if those jobs are part-time and woefully inadequate for funding a comfortable life.
So which metric should we trust to assess the city’s current economic situation? Well, neither. At least in totality.
So what does the Ludwig Institute’s True Unemployment Rate really count?
The institute calls its “functional unemployment” figure number the “True Rate of Unemployment,” or TRU — and it’s always higher than the federal unemployment rate released by the Bureau of Labor Statistics.
“The TRU Out of the Population measures the percentage of people in the whole U.S. population that is functionally unemployed,” according to the study. “Using data compiled by the federal government’s Bureau of Labor Statistics, the True Rate of Unemployment Out of the Population tracks the percentage of the U.S. labor force that does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage, conservatively pegged at $25,000 annually before taxes.”
The institute developed the True Rate of Unemployment scale to create a more accurate picture of how many people are actually making a living at their jobs. That’s in contrast to the standard unemployment rate from the federal government.
“Generally speaking, the unemployment rate is calculated by simply dividing the number of unemployed persons — as defined by the U.S. Bureau of Labor Statistics (BLS) — by the number of persons in the labor force (employed or unemployed who are actively seeking employment) and multiplying by 100,” the study explains. “While [the BLS measure] may be elegant in its simplicity, it presents a very incomplete and, in many ways, misleading picture.”
But here’s the thing
The Ludwig Institute’s numbers also present a simplistic, incomplete and somewhat misleading picture — even if the think tank does a better job of portraying the struggles of workers in the region than the federal statistics.
For anybody looking at Denver as a model: The $25,000 the institute counts as a living wage would be a stretch to live on.
A full-time worker making minimum wage ($18.29 per hour) would earn roughly $38,043 annually — well over the $25,000 cited in the study.
In Denver, an annual income under $25,000 is less than 30% of the $91,280 area median income for an individual. A household in that situation would qualify for nearly all government-subsidized housing.
In fact, housing is so expensive here that Denver offers some forms of government-subsidized housing for people making up to 80% of the area median income, which is $71,900 for a single person and $92,400 for a household of three.
Here’s what some private sector companies say people need to earn to live comfortably in the metro.
“Denver residents need an annual income of $167,562 to afford the median home,” according to a spokesperson for Clever Real Estate, a real estate data company.
That’s $76,282 more than the area median income for an individual.
According to a study by GoBankingRates, a personal finance website, renters in Denver need to earn $101,726 yearly to live without stress over bills, while homeowners need $144,616.
In a 2022 study, the Ludwig Institute, looking at more localized data, stated that a household of four needed just over $101,000 to live comfortably in Denver — a jump of more than 60% since 2005.
These studies offer some variation in their analysis of what it takes to live in the Denver area. Most people live here on less.
Even so, by all counts, the Ludwig Institute’s $25,000 a year “livable” income — a national standard — would be a pittance of what a person needs in the Denver metro.
Still, the Ludwig Institute says their measure has value
The government’s liberal count of who is actually employed has given economists a false sense of what constitutes a functioning economy, the Ludwig Institute argues.
High employment rates, as measured by the Bureau of Labor Statistics, are generally considered a sign of good economic health.
Those numbers, according to the institute, give policymakers bad information about how everyday people are actually doing.
“This continued dependence on aggregate U.S. economic data constructed for a bygone era has been clouding the basic understanding of what’s happening on the ground,” the study states. ”New measures are needed if we are to understand what’s really going on.”
To avoid any repercussions, Gupta suggests using a matter-of-fact tone when sharing the experience online.
“The world has changed. We know that jobs are not forever. With most layoffs, there is nothing to be ashamed of, even if you realize, ‘You know what, I wasn’t quite what they were looking for,’” she said.
“And if you can show a bit of class and professionalism, it goes a long way.”
Kadine Cooper, a career and life transition coach, said the first thing you should do after being informed of a layoff is take time to ground yourself and come to terms with the loss. Once you have processed those difficult emotions, ask yourself what you want to do next, where you can seek out mentorship and surround yourself with individuals who want you to succeed.
The best way to share a career update
When you’re ready to share your career update online, make sure to strike a positive and professional tone, as this can set you up for future opportunities, Cooper recommended.
“You still have the power, right? So start creating a positive narrative about it,” she said.
“Write your posts in a way that highlights your resilience and your adaptability and even maybe start emphasizing some of the experiences you gained during that time with the company.”
On the flipside, while some people choose to be candid about their layoff experiences to increase transparency around certain employers or industries, Cooper said “ranting and raging” on social media may hurt your future job prospects and discourage former co-workers from providing you with a reference for another job.
Meanwhile, Canada’s rise in unemployment comes as high borrowing costs weigh on businesses and strong population growth continues to add to the country’s labour supply. The unemployment rate was up one percentage point compared with a year ago.
“The problem is that we got a slight decline in employment at a time when the population is still increasing, very, very quickly. And that was the main cause of concern within this report,” Grantham later said in an interview.
Canada’s jobless rate and unemployment stats
Statistics Canada says the rise in the jobless rate was driven by an increase of 60,000 people searching for work or temporarily laid off. The total number of unemployed people in the country stood at 1.3 million last month, an increase of nearly 250,000 compared with a year ago.
Young people are particularly feeling the chill in the labour market. Employment among those aged 15 to 24 declined by 28,000 in March and the jobless rate for the group rose to 12.6%, the highest it’s been since September 2016 outside of pandemic years 2020 and 2021. An RBC report released in January said students and new graduates, rather than new arrivals to Canada, are driving the increase in unemployment in the country. (Here are the best jobs in Canada for immigrants.)
“Close to half of the increase in the total number of unemployed people year-over-year in Canada… were students that were not in the job market and have started looking for work,” Janzen said.
Photo by Maria Orlova from Pexels
Friday’s report shows job losses last month were concentrated in accommodation and food services, followed by wholesale and retail trade and professional, and scientific and technical services. Meanwhile, employment increased in four industries, led by healthcare and social assistance.
Despite weaker labour market conditions, wage growth continued to grow rapidly, with average hourly wages rising 5.1% annually.
Although economists are gearing up for rate cuts in the coming months, the job market is expected to remain weak for a while. Janzen expects the unemployment rate to peak at 6.5% in the third quarter of the year, noting interest rates will continue to restrict growth until they return to normal levels.
America’s employers delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes that the economy can vanquish inflation without succumbing to a recession in the face of high interest rates.
What You Need To Know
America’s employers delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes that the economy can vanquish inflation without succumbing to a recession in the face of high interest rates
Last month’s job growth was up from a revised 270,000 in February and far above the 200,000 economists had forecast
By any measure, it amounted to a strong month of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes
With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand
America’s employers delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes that the economy can vanquish inflation without succumbing to a recession in the face of high interest rates. Last month’s job growth was up from a revised 270,000 in February and far above the 200,000 economists had forecast. By any measure, it amounted to a strong month of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes. With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand. The unemployment rate dipped to 3.8% from 3.9% in February.
Last month’s job growth was up from a revised 270,000 in February and was far above the 200,000 economists had forecast. By any measure, it amounted to a strong month of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes. With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand.
Friday’s report from the Labor Department also showed that the unemployment rate dipped to 3.8% from 3.9% in February. That rate has now come in below 4% for 26 straight months, the longest such streak since the 1960s.
The economy is sure to weigh on Americans’ minds as the November presidential vote nears and they assess President Joe Biden’s re-election bid. Many people still feel squeezed by the inflation surge that erupted in the spring of 2021. Eleven rate hikes by the Fed have helped send inflation tumbling from its peak over the past year and a half. But average prices are still about 18% higher than they were in February 2021 — a fact for which Biden might pay a political price.
The Fed’s policymakers are tracking the state of the economy, the job market and inflation to determine when to begin cutting interest rates from their multi-decade highs — a move eagerly awaited by Wall Street traders, businesses, homebuyers and people in need of cars, household appliances and other major purchases that are typically financed. Rate cuts by the Fed would likely lead, over time, to lower borrowing rates across the economy.
The central bank’s policymakers started raising rates two years ago to try to tame inflation, which by mid-2022 was running at a four-decade high. Those rate hikes — 11 of them from March 2022 through July 2023 — helped drastically slow inflation. Consumer prices were up 3.2% in February from a year earlier, far below a year-over-year peak of 9.1% in June 2022.
Yet the sharply higher borrowing costs for individuals and companies that resulted from the Fed’s rate hikes were widely expected to trigger a recession, with waves of layoffs and a painful rise in unemployment. Yet to the surprise of just about everyone, the economy has kept growing steadily and employers have kept hiring at a healthy pace. Layoffs remain low.
Some economists believe that a rise in productivity — the amount of output that workers produce per hour — made it easier for companies to hire, raise pay and post bigger profits without having to raise prices. In addition, an influx of immigrants into the job market is believed to have addressed labor shortages and slowed upward pressure on wage growth. This helped allow inflation to cool even as the economy kept growing.
In the meantime, the Fed has signaled that it expects to cut rates three times this year. But it is awaiting more inflation data to gain further confidence that annual price increases are heading toward its 2% target. Some economists have begun to question whether the Fed will need to cut rates anytime soon in light of the consistently durable U.S. economy.
Biden noted in a statement that Friday’s jobs report pushed the number of jobs added during his administration over 15 million, which he called a milestone.
“Three years ago, I inherited an economy on the brink,” he said. ” … Wages are going up. Inflation has come down significantly. We’ve come a long way, but I won’t stop fighting for hardworking families.”
Acting Labor Secretary Julie Su told Spectrum News this month’s jobs report “is a part of a story of President Biden’s leadership and what that has meant for the economy.”
“Overall, we are pleased with the report,” she said. “But more, it’s a reflection of steady, stable growth that has characterized this economy since the president came into office.”
America’s employers delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes that the economy can vanquish inflation without succumbing to a recession in the face of high interest rates.
What You Need To Know
America’s employers delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes that the economy can vanquish inflation without succumbing to a recession in the face of high interest rates
Last month’s job growth was up from a revised 270,000 in February and far above the 200,000 economists had forecast
By any measure, it amounted to a strong month of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes
With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand
America’s employers delivered another outpouring of jobs in March, adding a sizzling 303,000 workers to their payrolls and bolstering hopes that the economy can vanquish inflation without succumbing to a recession in the face of high interest rates. Last month’s job growth was up from a revised 270,000 in February and far above the 200,000 economists had forecast. By any measure, it amounted to a strong month of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes. With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand. The unemployment rate dipped to 3.8% from 3.9% in February.
Last month’s job growth was up from a revised 270,000 in February and was far above the 200,000 economists had forecast. By any measure, it amounted to a strong month of hiring, and it reflected the economy’s ability to withstand the pressure of high borrowing costs resulting from the Federal Reserve’s interest rate hikes. With the nation’s consumers continuing to spend, many employers have kept hiring to meet steady customer demand.
Friday’s report from the Labor Department also showed that the unemployment rate dipped to 3.8% from 3.9% in February. That rate has now come in below 4% for 26 straight months, the longest such streak since the 1960s.
The economy is sure to weigh on Americans’ minds as the November presidential vote nears and they assess President Joe Biden’s re-election bid. Many people still feel squeezed by the inflation surge that erupted in the spring of 2021. Eleven rate hikes by the Fed have helped send inflation tumbling from its peak over the past year and a half. But average prices are still about 18% higher than they were in February 2021 — a fact for which Biden might pay a political price.
The Fed’s policymakers are tracking the state of the economy, the job market and inflation to determine when to begin cutting interest rates from their multi-decade highs — a move eagerly awaited by Wall Street traders, businesses, homebuyers and people in need of cars, household appliances and other major purchases that are typically financed. Rate cuts by the Fed would likely lead, over time, to lower borrowing rates across the economy.
The central bank’s policymakers started raising rates two years ago to try to tame inflation, which by mid-2022 was running at a four-decade high. Those rate hikes — 11 of them from March 2022 through July 2023 — helped drastically slow inflation. Consumer prices were up 3.2% in February from a year earlier, far below a year-over-year peak of 9.1% in June 2022.
Yet the sharply higher borrowing costs for individuals and companies that resulted from the Fed’s rate hikes were widely expected to trigger a recession, with waves of layoffs and a painful rise in unemployment. Yet to the surprise of just about everyone, the economy has kept growing steadily and employers have kept hiring at a healthy pace. Layoffs remain low.
Some economists believe that a rise in productivity — the amount of output that workers produce per hour — made it easier for companies to hire, raise pay and post bigger profits without having to raise prices. In addition, an influx of immigrants into the job market is believed to have addressed labor shortages and slowed upward pressure on wage growth. This helped allow inflation to cool even as the economy kept growing.
In the meantime, the Fed has signaled that it expects to cut rates three times this year. But it is awaiting more inflation data to gain further confidence that annual price increases are heading toward its 2% target. Some economists have begun to question whether the Fed will need to cut rates anytime soon in light of the consistently durable U.S. economy.
Biden noted in a statement that Friday’s jobs report pushed the number of jobs added during his administration over 15 million, which he called a milestone.
“Three years ago, I inherited an economy on the brink,” he said. ” … Wages are going up. Inflation has come down significantly. We’ve come a long way, but I won’t stop fighting for hardworking families.”
Acting Labor Secretary Julie Su told Spectrum News this month’s jobs report “is a part of a story of President Biden’s leadership and what that has meant for the economy.”
“Overall, we are pleased with the report,” she said. “But more, it’s a reflection of steady, stable growth that has characterized this economy since the president came into office.”
After claiming the title of lowest state unemployment rate in the country last year, Maryland’s unemployment rate rose for the third consecutive month in February.
After claiming the title of lowest state unemployment rate in the country last year, Maryland’s unemployment rate rose for the third consecutive month in February.
Virginia’s unemployment rate held steady last month.
Virginia’s unemployment rate was 3.0%, unchanged from December and January. It was about the same as a year earlier.
North Dakota had the lowest state unemployment rate in February, at 2.0%, followed by South Dakota, at 2.1%. California now has the highest unemployment rate among states, at 5.3%, displacing Nevada, which now has the second-highest state unemployment rate, at 5.2% in February.
Nationally, the unemployment rate in February rose 0.3% to 3.9%.
Maryland had about 24,000 more jobs at the end of February. Virginia ended the month with a year-over-year payroll gain of 38,000 jobs.
The Bureau of Labor Statistics posts monthly unemployment and civilian payroll changes by state online.
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Regular benefits are paid to eligible employees who lose their job through no fault of their own, JM. Typically, this would include those who are terminated because of a restructuring or those who work in seasonal industries.
Special benefits include parental benefits (maternity and parental leave), sickness benefits (for those who cannot work due to injury or illness), compassionate care benefits (for those caring for a seriously ill family member needing end-of-life care) or parents of critically ill children benefits (regardless of their age).
An optional retirement is not a qualifying reason for EI benefits, JM, because it does not fall into the special benefits categories and regular benefits are not meant to pay out to people who choose to stop working.
Can you get EI if you quit your job in Canada?
If your retirement, JM, is not your choice, you may qualify for regular benefits. Of note is that there are several reasons when quitting a job is considered “just cause,” but you must be able to substantiate to Service Canada that quitting was the only reasonable option.
These reasons may include:
sexual or other harassment
needing to move with a spouse or dependent child to another place of residence
discrimination
working conditions that endanger your health or safety
having to provide care for a child or another member of your immediate family
reasonable assurance of another job in the immediate future
major changes in the terms and conditions of your job affecting wages or salary
excessive overtime or an employer’s refusal to pay for overtime work
major changes in work duties
difficult relations with a supervisor, for which you are not primarily responsible
your employer is doing things which break the law
discrimination because of membership in an association, organization or union of workers
pressure from your employer or fellow workers to quit your job
Can you receive EI and OAS and CPP?
If you do qualify for EI benefits, JM, your Old Age Security (OAS) pension won’t impact your eligibility for EI benefits, since it is an age-based pension that does not have to do with work or earnings. However, Canada Pension Plan (CPP) or Québec Pension Plan (QPP) benefits will, as they are pensions that are related to work and earnings. Likewise, with employer pension plans and even foreign pensions that arose from employment in another country.
CPP, QPP and employer pensions generally constitute “earnings” that reduce your entitlement to EI benefits and must be reported to Service Canada. These types of earnings are deducted from your EI benefits.
There is an impact on your EI if you have earnings while receiving it, whether from employment, self-employment, or CPP/OAS/workplace pension income. You lose $0.50 of your EI for every $1 you earn up to 90% of your previous weekly earnings. For earnings in excess, EI benefits get reduced dollar-for-dollar.
Over the course of 2023, U.S. employers added 2.7 million people to their payrolls, according to government data. Unemployment hit a 54-year low at 3.4% in January 2023 and ticked up just slightly to 3.7% by December.
“The labor market has been fairly strong and surprisingly resilient,” said Daniel Zhao, lead economist at Glassdoor. “Especially after 2023 when we had headlines about layoffs and forecasts of recession.”
But active job seekers say the labor market feels more difficult than ever.
A 2023 survey from staffing agency Insight Global found that recently unemployed full-time workers had applied to an average of 30 jobs, only to receive an average of four callbacks or responses.
“Between the news, the radio, and politicians just talking about how the economy is so great because unemployment is low and just hearing all that, I just want to scream from the rooftops: Then how come no one can find a job?” said Jenna Jackson, a 28-year-old former management consultant from Ardmore, Pennsylvania. She has been actively looking for a job since her layoff four months ago.
“I haven’t quantified how many applications I’ve applied to but it’s definitely in the hundreds at least,” Jackson said.
More than half, 55%, of unemployed adults are burned out from searching for a new job, Insight Global found. Younger generations were affected the most, with 66% complaining of burnout stemming from job search.
A major reason could be the fact that the labor market is cooling.
“There’s less of a frenzy on the part of the employers,” according to Peter Cappelli, a management professor at the University of Pennsylvania. “If you’re somebody who wants a job, you would like a frenzy on the part of the employers because you would like to have lots of people trying to hire you.”
“How people feel about the job market is informed by their recent experiences with the job market,” Zhao said. “In 2021 and 2022, there were labor shortages, so [employers] were offering all kinds of perks and benefits to try to get people in the door. So even if 2024 is shaping up to be a relatively healthy labor market by recent comparison, it doesn’t feel quite as strong.”
Watch the video above to find out why getting a job feels harder than ever.
The first jobs report of the year emphatically underlined the surprising strength of the U.S. labor market, with robust hiring despite the highest interest rates in two decades.
The U.S. economy added 353,000 jobs in January after upward revisions in November and December, the government reported on Friday. Hiring blew past economists’ expectations for 176,000 new jobs, with wages also rising and the unemployment rate remaining near a 50-year low of 3.7%.
It is the first time since the late 1960s that the nation’s jobless rate has been below 4% for two consecutive years, according to PNC Financial Services Group.
The latest gains far showcased employers’ willingness to keep hiring to meet steady consumer spending. This week, the Federal Reserve took note of the economy’s durability, with Chair Jerome Powell saying “the economy is performing well, the labor market remains strong.”
The Fed made clear that while it’s nearing a long-awaited shift toward cutting interest rates, it’s in no hurry to do so. The latest jobs report could convince the central bank to push off its first rate cut until later in 2024, experts said on Friday.
“The stronger than expected jobs report shows how the job market continues to be a bright spot within the U.S. economy,” offered Joe Gaffoglio, President of Mutual of America Capital Management. “Fed Chair Jerome Powell recently signaled that interest-rate cuts may not start as soon as the market wanted, and this jobs report hasn’t given him any reason to change that stance.”
On Wednesday, the Fed held the rate unchanged at its first policy meeting of the year, with the bank signaling a desire for more progress in fighting inflation in 2024. That is heightening investor focus on exactly when the Fed might release the brakes on the U.S. economy for the first time in two years.
Wages rising ahead of inflation
Wage growth was also surprisingly strong in January. Average hourly earnings increased 19 cents, or 0.6%, to $34.55, and have risen 4.5% over the past 12 months, keeping just ahead of inflation.
Treasury yields jumped and stock-index futures trimmed gains in the wake of the report, as market participants bet against the U.S. central bank reducing its benchmark rate as soon as March.
A series of notable layoff announcements, from the likes of UPS, Google and Amazon, have raised some concerns about whether they might herald the start of a wave of job cuts. Layoffs nationwide more than doubled in January from a month earlier, according to analysis from executive coaching firm Challenger & Christmas.
Yet measured against the nation’s vast labor force, the recent layoffs haven’t been significant enough to make a dent in the overall job market. Historically speaking, layoffs are still relatively low, hiring is still solid and the unemployment rate is still consistent with a healthy economy.
The job market remains one of the U.S. economy’s main engines, with the nation’s unemployment rate near a 50-year low and wages finally pulling ahead of inflation. At the same time, major companies in technology, finance, media and other key sectors have all recently announced sizable job cuts, with layoffs nationwide more than doubling in January from a month earlier.
U.S. companies in January announced more than 82,300 job cuts, a 136% increase from December, according to a new analysis from executive coaching firm Challenger, Gray & Christmas.
That may raise questions about the strength of the labor market as well as concerns among employees about their job security. On Friday, new government data is expected to show that businesses hired about 177,000 workers, with the jobless rate ticking up slightly to 3.8% from 3.7% in December, according to economists polled by FactSet.
Recent layoffs are mostly clustered in a few industries, with experts saying that the job market as a whole remains strong. Here’s what is driving the recent spike in layoffs and what it tells us about the state of the economy.
Is the job market in bad shape?
Not according to economists, who point to the nation’s relatively low jobless rate and ongoing hiring.
Even so, the job market has definitely cooled from the hiring frenzy that occurred in 2021 and 2022. During those years, businesses snapped up workers as the economy began to recover from the initial shock of the pandemic, leading to a job market so tight it spurred millions of Americans to switch jobs in search of better pay and working conditions — a trend dubbed the “Great Resignation.”
Americans may be comparing the unusually strong job market in those years with today’s cooler hiring. The U.S. economy added 4.8 million jobs in 2022, with that pace slowing to 2.7 million new jobs in 2023 — the latter is still higher than hiring in years prior to the pandemic, according to JPMorgan Wealth Management.
“[L]abor market conditions have loosened, but the job market remains healthy,” analysts with Oxford Economics said in a report this week.
One encouraging sign: 57% of small businesses — which account for roughly 46% of private-sector employees — plan to add jobs this year, according to a new Goldman Sachs survey of 1,459 small business owners taken earlier this month. Three-quarters also expressed optimism about their financial prospects this year, the investment bank found.
How do the 2024 layoffs compare with prior years?
Excluding January 2023, the January layoffs this year represent the highest number of job cuts announced in the first month of the year since January 2009, according to Challenger, Gray & Christmas.
At the time, the U.S. economy was mired in the Great Recession, spurring businesses to cut more than 241,000 jobs that month.
Who is getting laid off in 2024?
January’s job cuts are mostly among financial and tech businesses, Challenger, Gray & Christmas noted.
Financial firms announced the largest number of layoffs last month, at more than 23,200, which represents the highest number of job cuts for the industry since September 2018, when more than 27,000 jobs were cut. One of the biggest layoff announcements in the sector came from Citigroup, which said it plans to cut 20,000 jobs.
Tech employees suffered the second-largest number of layoffs, with almost 16,000 people losing their jobs, according to the analysis. Alphabet-owned Google, Microsoft and Salesforce were among the big tech companies slashing thousands of jobs last month.
Media businesses also increased their job cuts, although the number of layoffs is relatively small. News businesses cut a total of 528 workers in January, a 1,660% increase from December, Challenger, Gray & Christmas noted.
Why are companies cutting workers?
Some companies are seeking to cut costs amid the rise in interest rates, while others are shedding workers after a hiring binge during the pandemic. Other businesses are refocusing to invest in artificial intelligence, which has prompted job cuts in some of their non-AI business units.
“[T]hese layoffs are also driven by broader economic trends and a strategic shift towards increased automation and AI adoption in various sectors, though in most cases, companies point to cost-cutting as the main driver for layoffs,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, in a statement.
Will there be more layoffs in 2024?
That is likely given the push by many businesses to trim costs. The jobless rate could rise to 4.1% this year, according to a recent forecast from Oxford Economics.
Federal Reserve Chair Jerome Powell said this week that the central bank wants to see the labor market cool without causing a jump in joblessness — part of a so-called soft landing, or a cooling of inflation and economic growth, while avoiding a recession.
“We’re hoping to see … a continuation of what we have seen, a labor market coming into better balance without a significant increase in unemployment,” Powell said.
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
The U.S. labor market closed out 2023 in strong shape as the pace of hiring was even more powerful than expected, the Labor Department reported Friday.
December’s jobs report showed employers added 216,000 jobs for the month while the unemployment rate held at 3.7%. Payroll growth showed a sizeable gain from November’s downwardly revised 173,000.
Economists surveyed by Dow Jones had been looking for payrolls to increase 170,000 and the unemployment rate to nudge higher to 3.8%.
Markets reacted negatively to the report, with stock market futures sliding and Treasury yields sharply higher.
This is breaking news. Please check back here for updates.
Back in January, Bank of America was one of many investment banks that believed the U.S. economy was barreling toward recession. With the Federal Reserve raising interest rates at a breakneck pace to fight inflation, the economy would eventually slow to standstill, the bank warned. But as the year went on, economic data pleasantly surprised Wall Street, leading Bank of America’s chief U.S. economist Michael Gapen to begin shifting his recession forecast.
In June, Gapen argued that instead of facing a mild recession as early as the fourth quarter of 2023, the U.S. was likely to fall into an even more tame “growth recession” in 2024. Then, in August, he scrapped the recession call altogether due to the resilience of the labor market and consumer spending amid the Fed’s aggressive rate hikes. Parroting some Beatles lyrics, Gapen titled the note where he detailed his new, more optimistic forecast: “Imagine no recession, it’s easy if you try.”
Now, the veteran economist has turned even more bullish after multiple positive GDP, inflation, and retail sales reports. Consumers’ ability to keep spending even amid rising borrowing costs has convinced Gapen that the vaunted “soft landing”—where the Fed is able to tame inflation without sparking a job-killing recession—is becoming a reality.
“While there are many ways the U.S. economy can evolve, the Fed appears closer to ‘sticking the landing’ than ever,” he wrote in a note to clients Monday.
‘An even softer landing’
Gapen explained Monday that his initial call was based simply on history. At the beginning of the year, “surging inflation” and “a Fed that was prepared to err on the side of doing more than less in its fight to bring inflation down” convinced him there would be economic pain ahead. Over 11 periods of rapidly rising interest rates in a 60-year span, only one has resulted in a “soft landing,” making its odds this time around very slim.
Now, though, Gapen says his economic outlook was “too negative,” as both consumers and business have shown “significant resilience” to higher rates.
“As the calendar turns to 2024, we make further revisions to our outlook for the US in the direction of an even softer landing,” he wrote Monday, arguing that the Fed’s indicating “the potential beginnings of a rate cut cycle” could boost the economy in 2024.
Bank of America’s new outlook for the U.S. economy includes increased economic growth as well as lower inflation and unemployment. The bank expects GDP growth of 1.2% in 2024, 0.6 percentage points above its prior forecast; an unemployment rate of 4.2%, down from 4.4%; and inflation, as measured by the personal consumption expenditures price index, of 2.2%, down from 2.4%.
Gapen said that the strength of the economy in 2024 will be driven by consumer spending, which accounts for roughly 70% of U.S. GDP. Even though many consumers are pessimistic about their prospects, they continue to spend this holiday season. Retail sales shot up 4.1% from a year ago in November as shoppers splurged on Black Friday and Cyber Monday discounts.
Part of the reason for the resilient consumer spending is “elevated net wealth,” according to Gapen. The stock market’s 23% surge so far this year, as well as years of booming home prices, have made many Americans far richer. The median net worth of U.S. households jumped 37% to $192,900 between 2019 and 2022, according to the Federal Reserve’s Survey of Consumer Finances.
The rise in Americans’ wealth means that, as long as the labor market remains strong, consumers are likely to continue their spending spree, Gapen said. And with inflation cooling from its four-decade high of over 9% in June 2022 to just 3.1% in November, a soft landing is likely.
“Incoming data is signaling the U.S. economy can enjoy both modest growth and disinflation simultaneously,” the veteran economist wrote.
The U.S. economy is built different
Falling inflation and resilient growth are not a common combination for most economies, but Gapen believes the U.S. has “structurally changed” over the past decade or so, making it more resilient to higher interest rates. In the housing market, for example, lending standards have improved and the number of adjustable rate mortgages has plummeted since the Global Financial Crisis (GFC) of 2008. These, often risky, interest-rate-sensitive mortgages now make up just 9.2% of the market, compared to roughly 35% during the housing boom that led up to the GFC.
At the same time, Gapen noted that many of the drivers of the rise of U.S. inflation over the past few years have been related to supply shocks during the pandemic era, which are now fading.
“Supply-side improvements have helped bring inflation down more rapidly than we and the Fed had assumed previously,” he explained. “It opens the door for inflation to decelerate without putting policymakers in the position of implementing significant demand destruction.”
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The U.S. economy continues to grow despite the 5.5% benchmark federal funds interest rate set by the Federal Reserve in 2023.
The Fed’s leaders expect their interest rate decisions to eventually slow that growth.
The increase in borrowing costs that stems from Fed decisions does not affect all consumers immediately. It typically affects people who need to take new loans — first-time homebuyers, for example. Other dynamics, such as the use of contracts in business, can slow the ripple of Fed decisions through an economy.
“It might not all hit at once, but the longer rates stay elevated, the more you’re going to feel those effects,” said Sarah House, managing director and senior economist at Wells Fargo.
“Consumers did have additional savings that we wouldn’t have expected if they had continued to save at the same pre-Covid rate. And so that’s giving some more insulation in terms of their need to borrow,” said House. “That’s an example of why this cycle might be different in terms of when those lags hit, versus compared to prior cycles.”
A 1% interest rate increase can reduce gross domestic product by 5% for 12 years after an unexpected hike, according to a research paper from the Federal Reserve Bank of San Francisco.
“It’s bad in the short term because we worry about unemployment, we worry about recessions,” said Douglas Holtz-Eakin, president of the American Action Forum, referring to the paper’s implications for central bank policymakers. “It’s bad in the long term because that’s where increases in your wages come from; we want to be more productive.”
Some economists say that financial markets may be responding to Federal Reserve policy more quickly, if not instantaneously. “Policy tightening occurs with the announcement of policy tightening, not when the rate change actually happens,” said Federal Reserve Governor Christopher Waller in remarks July 13 at an event in New York.
“We’ve seen this cycle where the stock market moved more quickly in some cases, more slowly in other cases,” said Roger Ferguson, former vice chair of the Federal Reserve. “So, you know, this question of variability comes into play, as in how long it’s going to take. We think it’s a long time, but sometimes it can be faster.”
Watch the video above to see why the Fed’s interest rate hikes take time to affect the economy.
According to the latest jobs report, U.S. employers added 199,000 jobs in November, a sign that the labor market is still going strong, while the unemployment rate dropped to 3.7% in November. CBS News contributor Javier David, managing editor for business and markets at Axios, says the report is “boring in the right ways.”
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For more than a month, protests against Central America’s largest open-pit copper mine have held Panama in a state of siege. Roadblocks have caused gas and propane shortages. Many supermarket shelves have run bare. Restaurants and hotels have sat empty.
But on Tuesday, protesters in Panama got the news they were waiting for.
The country’s Supreme Court of Justice ruled that Panama’s new mining contract with the Canadian company First Quantum was unconstitutional.
Protesters danced in the streets in front of the Supreme Court. They waved the red, white and blue Panamanian flag and sang the national anthem.
The ruling, a big blow for investors and the country’s long-term credit rating, is, for the moment, a source of relief for Panama, which has been shaken by the country’s largest protest movement to plague the country in decades.
The news of the Supreme Court ruling came early on Tuesday – the day of the anniversary of Panama’s Independence from Spain.
“Today, we are celebrating two independences,” 58-year-old restaurant worker Nestor Gonzalez told Al Jazeera. “Independence from Spain and independence from the mine. And no one is going to forget it.”
People turned out to celebrate. The bistro where Gonzalez works, in the western province of Chiriqui, was packed with patrons by noon – something the restaurant had not seen since mid-October.
“We are so happy,” said Gonzalez, “because, we had been locked up in the province of Chiriqui for 35 days, without gas, without propane and with little food. I had to go look for firewood in the mountains because I had no propane to cook with. So thank God that the justices took a stand and issued this ruling.”
The mine, known as Cobre Panama, has been in production since 2019, and extracting 300,000 tonnes of copper a year. It represents roughly five percent of the country’s gross domestic product (GDP) and 75 percent of Panamanian exports. The mining sector contributes roughly seven percent of Panama’s GDP with Cobre Panama as the country’s most important mine.
But protesters said Cobre Panama was a disaster for the country’s environment and a handout to a foreign corporation.
“I’m protesting because they are stealing our country. They are just handing it over,” said Ramon Rodriguez, a protester in a yellow raincoat in a march in late October, after protests ignited against the mine. “The sovereignty of our country is in danger. That’s why I’m here.”
This question of sovereignty is particularly important for Panamanians, who fought throughout the 20th century to rid the country of the United States-controlled Panama Canal Zone. This was an area almost half the size of the US state of Rhode Island that sliced through the middle of Panama.
“This contract is bad. It never should have been made. Never. So you have to fight,” said Miriam Caballero, a middle-aged woman in a grey sweatshirt who watched the October protest pass.
Protesters said Cobre Panama was a disaster for the country’s environment and a handout to the Canadian firm that had the mining contract [Michael Fox/Al Jazeera]
Impact on foreign investment
This was not the first contract with the mine. In 2021, the Supreme Court declared the previous contract unconstitutional for not adequately benefitting the public good. The government of President Laurentino Cortizo renegotiated the contract with improved benefits for the state. This was fast-tracked through Congress on October 20. Cortizo signed it into law hours later.
The president and his cabinet had applauded the new contract, saying it would bring windfall profits for the state.
“The contract ensures a minimum payment to the state of $375m dollars a year, for the next 20 years,” Commerce Minister Federico Alfaro told Panama news outlet Telemetro. “If you can compare this with what the state was receiving before, which was $35m a year, it’s a substantial improvement to the past.”
Cortizo promised to use the funds to shore up the country’s Social Security Fund and increase pensions for more than 120,000 retirees.
After the protests spiralled out of control, he announced a moratorium on all new mining projects and promised to hold a referendum over the fate of Cobre Panama. The idea didn’t gain traction. The protesters wouldn’t budge.
Members of Panama’s business sector have blamed Cortizo for mishandling the crisis and refusing to use a heavy hand to end the roadblocks and stop the protests. Last week, they said it had cost the country $1.7bn.
Cortizo, whose approval rating was already down to 24 percent in June, responded to this week’s court ruling, stating, “All Panamanians need to respect and abide by the decisions of the Supreme Court.”
Analysts say the protests and the ruling will have an impact for foreign companies looking to do business in Panama.
“I believe this court ruling is sending a very clear message to foreign investors,” Jorge Cuellar, assistant professor of Latin American studies at Dartmouth College, told Al Jazeera. “If this is the kind of foreign investment that politicians and capitalists are innovating in 2023, then Panamanians want no part of it.”
But this stance will likely come at a price.
In early November, after more than a week of protests, rating agency Moody’s downgraded Panama’s debt to the lowest investment-grade rating. It cited financial issues and noted the political turmoil. JP Morgan analysts said, at the time, that if the mining contract were revoked, it would substantially increase Panama’s risk of losing its investment-grade rating.
First Quantum also has much to lose. Its shares have lost 60 percent of their value over the last month and a half. More than 40 percent of the company’s production comes from the Panamanian mine.
Over the weekend, the company notified Panama that it planned to take the country to arbitration under the Free Trade Agreement between the two countries.
But in a statement released after the ruling, First Quantum said, “The Company wishes to express that it respects Panamanian laws and will review the content of the judgement to understand its foundations.”
Protesters said the country’s sovereignty was at stake [Michael Fox/Al Jazeera]
‘Jobs at risk’
The announcement is also a blow for the employees of the mine. The mine employs roughly 6,600 people – 86 percent of whom are Panamanian – and a total 40,000 direct and indirect jobs.
The Union of Panamanian Mine Workers, Utramipa, announced its members would march in several cities on Wednesday against the Supreme Court decision and in defence of their jobs.
“We are not going to allow them to put our jobs at risk, which are our means for supporting our families,” the union said in a statement.
Last week, Utramipa member Michael Camacho denounced the protests on the news outlet Panama En Directo. Operations at the mine were suspended last week due to protests at its port and the highway in and out of the facility.
“What about us, the workers? We are also Panamanians. We have the right to go to our homes and return to our place of work,” said Camacho. “But at this moment, we are being held hostage by the protesters, by the anti-social, the terrorists – which is what we should call them – and the people that stop us from passing.”
For the majority of Panamanians, the Supreme Court ruling is a welcomed sign that the country is on the road to normalcy.
Protesters in some provinces have promised to stay in the streets until the Supreme Court ruling is officially published – which usually takes a few days – or until the mine is closed for good. But many roadblocks have now been cleared, highways that stood empty for weeks are now open, and gas stations are rolling back in business.
“We are in a new phase,” Harry Brown Arauz, the director of Panama’s International Center of Social and Political Studies, told Al Jazeera. “The protests, as we have seen until now, should be lifted. And the government has said that it will begin the process of closing the mine in an orderly manner. This can generate confidence in the population, which had been lost.”
Arauz says the protest movement and the ruling are a powerful sign of the strength of Panama’s democracy, which the country regained just over 30 years ago.
“This is a really important moment,” he says. “It marks a before and after for Panamanian democracy.”
BOULDER, Colo., November 13, 2023 (Newswire.com)
– California residents interested in exploring a community-oriented career in K-12 school food can apply now to Chef Ann Foundation’s (CAF) Healthy School Food Pathway Pre-Apprenticeship program. This paid, work-based learning experience prepares individuals for job opportunities in school food programs focused on serving students healthy and delicious meals.
The Pre-Apprenticeship spans seven weeks and includes 84 hours of work experience at a participating school district in California; self-paced online courses; and live virtual learning sessions. Pre-Apprentices are mentored by experienced school food professionals who are passionate about children’s health and creating positive change in their community.
“There have been so many people I’ve met during my career working in the school food space who say they wish they knew about it as a career path sooner,” CAF Senior Director of California Workforce Programs Emily Gallivan said. “The Pre-Apprenticeship program was designed to really provide an opportunity for individuals to get first-hand experience in school food, while at the same time lift up those already working in the field.”
The Pre-Apprenticeship is open to all California residents, including current school food service employees seeking a professional development opportunity. Applicants do not need prior food service experience to apply.
Individuals who complete the Pre-Apprenticeship can continue their training in healthy K-12 school food by participating in CAF’s comprehensive Apprenticeship program, which takes approximately 9 months to complete and is also paid.
The Pre-Apprenticeship Fall 2023 application period opens November 13, 2023 and closes February 12, 2024. Interested individuals can learn more about the program and apply here. A list of California school districts participating in the Pre-Apprenticeship program can be found here.
CAF will also be hosting an informational webinar on November 16, 2023 at 3 p.m. ET to give potential applicants the opportunity to hear from former and current program participants.
Supporting Student Health
Gaby Flores, a school food worker with Santa Clara Unified School District, was the first person to complete both the Healthy School Food Pathway Pre-Apprenticeship and Apprenticeship programs, which were launched in 2022. One of Flores’ most notable responsibilities was overseeing the school kitchen at Scott Lane Elementary, which served over 350 students every school day.
“One of the main things that inspired me to join the program was to contribute to changing the food menu offered by the schools,” Flores said. “The possibility to help students enjoy better quality and healthier meals is fundamental to reaching their potential.”
