Payroll growth decelerated in December but was still better than expected, a sign that the labor market remains strong even as the Federal Reserve tries to slow economic growth.
Nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate for 200,000, while the unemployment rate fell to 3.5%, 0.2 percentage point below the expectation. The job growth marked a small decrease from the 256,000 gain in November, which was revised down 7,000 from the initial estimate.
Wage growth was less than expected in an indication that inflation pressures could be weakening. Average hourly earnings rose 0.3% for the month and increased 4.6% from a year ago. The respective estimates were for growth of 0.4% and 5%.
By sector, leisure and hospitality led with 67,000 added jobs, followed by health care (55,000), construction (28,000) and social assistance (20,000).
Stock market futures rose following the release as investors look for signs that the jobs market is cooling and taking inflation lower as well.
The relative strength in job growth comes despite repeated efforts by the Fed to slow the economy, the labor market in particular. The central bank raised its benchmark interest rate seven times in 2022 for a total of 4.25 percentage points, with more increases likely on the way.
Primarily, the Fed is looking to bridge a gap between demand and supply. As of November, there were about 1.7 job openings for every available worker, an imbalance that has held steady despite the Fed’s rate hikes. The strong demand has pushed wages higher, though they mostly haven’t kept up with inflation.
The drop in the unemployment rate came as the labor force participation rate edged higher to 62.3%, still a full percentage point below where it was in February 2020, the month before the Covid-19 pandemic hit.
A more encompassing measure of unemployment that takes into account discouraged workers and those holding part-time jobs for economic reasons also declined, falling to 6.5%, its lowest-ever reading in a data set that goes back to 1994. The headline unemployment rate is tied for the lowest since 1969.
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Amid last year’s U.S. economic upheaval, the ultra-tight job market was a rare high point, with low unemployment, strong hiring and rapidly rising wages.
The government’s employment report for December, set to be released on Friday, will indicate just how good that year was. Wall Street, the Federal Reserve and businesses nationwide will be closely scrutinizing the figures to see how hot the job market has been — or whether it’s showing signs of a slowdown.
Here’s what they’ll be looking at.
How many jobs did the U.S. create?
Economists expect employers to have added 200,000 jobs in December, according to a survey on FactSet. That would mark a decline from the robust pace of hiring in the second half of the year, but would still indicate far stronger job creation than what is needed to keep up with population growth and unemployment from rising.
“Announced hiring freezes began to spread in late autumn, but most companies continued to honor signed offers,” Glassdoor chief economist Aaron Terrazas said in a blog post. “Combined with accelerating layoffs, the earliest signals of slower hiring are likely to be visible in the December jobs data.”
Do more jobs mean more people working?
Economists also will look closely at the unemployment rate and other measures of worker health, including whether people say they’re looking for work or not.
The Labor Department’s monthly employment report is compiled from two separate surveys — one that polls businesses and one for households, and the two have diverged in recent months. In particular, the unemployment rate is calculated from the household survey. The rate recently rose to a still-low 3.7%, but the household survey also showed that the number of Americans with jobs has dropped since early fall.
“There’s uncertainty not just about what’s going to happen but about what has happened in the past year,” said Julia Pollak, chief economist at ZipRecruiter. “Right now, the establishment survey suggests the economy added 5 million jobs in the past year; the household survey suggests we added just half as many.”
What’s happening with temp jobs?
Employment in temporary jobs is often seen as a leading indicator of the job market as a whole. Companies that are growing fast will typically turn to contract and temp workers first, before increasing their own payrolls — conversely, companies that are cutting back find it easier to trim outside help.
“Temp help employment has been declining for three straight months, so does it decline or does it grow?” Pollak said. Another indicator is aggregate working hours, which give a hint of whether overall labor intensity is growing or flat.
“Working hours surged in 2021 and have since been coming down. They’re now right down to where they were pre-pandemic,” she said. “That suggest the job market is back to normal and demand has been sagging; if that [drop] continues, that would be a sign that demand is cooling.”
Wage growth unexpectedly picked up in November — good news for workers who have been battered by inflation, but bad news for the Federal Reserve, which has signaled it wants to see workers’ pay decline substantially, as it believes that will reduce inflation.
Economists will be watching the report closely to see whether November’s payroll jump was real and try to guess the direction wages will go in the future.
“The cost of wages and benefits is one area where I expect to see some pressure looking forward,” Gregory Daco, chief economist at EY-Parthenon, told CBS News. “That’s why we expect to see wages gradually declining over this year.”
What industries grow and shrink?
The technology and, to a lesser degree, finance and warehousing and transportation industries have stood out for their heavy job cuts. Just this week, Amazon said it would cut a total of 18,000 workers, while software giant Salesforce and video service Vimeo moved to slash cut a tenth of their workforce.
According to layoffs.fyi, there were 154,000 jobs cut in the tech sector last year. But these figures aren’t yet showing up in the government’s monthly reports, which show employment in the information industry continuing to rise. A broader report of job turnover from the government also showed no substantial increase in unemployment. That could mean laid-off tech workers are quickly finding other jobs or that they are leaving the job market altogether.
Pollak noted that the three sectors where layoffs have risen — tech, finance and warehousing — are all areas that saw a growth surge during the pandemic because of unprecedented changes like a boom in retail stock trading and a shift to working and shopping online.
“All those conditions have now changed. We’re seeing contraction, pullback, cost-cutting,” she said. “It’s worth monitoring, but [government] data don’t suggest there’s been a meaningful increase in layoffs.”
CNBC’s Hugh Son joins CNBC’s ‘Squawk on the Street’ to report on Goldman Sachs’ job cuts that are coming next month. The firm is expected to lay off about 4,000 employees in the first two weeks of January.
As Wall Street and Main Street fret about a potential recession, White House officials are projecting confidence about the economy’s ability to weather the storm in 2023.
“We’re feeling cautiously optimistic because we are starting to see some real concrete measurable signs of progress,” Aviva Aron-Dine, deputy director of the White House National Economic Council, told CNN in a Zoom interview.
The Biden administration economist pointed to a range of metrics showing inflation has cooled off, real wages have heated up and the job market has defied doomsday predictions.
The White House is hoping for a soft landing, in which the Federal Reserve tames inflation without crashing the economy.
“We remain optimistic about a transition to stable, steady growth with lower inflation – without giving up labor market gains, without a recession,” Aron-Dine said.
So far, so good – at least from the administration’s perspective.
For the moment, metrics suggest the economy has remained resilient and consumers are more optimistic as inflation has eased. The Conference Board’s latest consumer confidence index this month, for example, showed a significant jump from November. And after spiking to record highs in June, gas prices have plunged to 17-month lows, delivering a major boost to consumers.
And some broader trends appear to be working in the administration’s favor, like hiring, which has slowed but has not collapsed.
There is “absolutely no sign” that job growth will fall on a “sustained basis” below a pace of roughly 150,000 jobs a month, Aron-Dine said.
Last month, the US economy added a surprisingly strong 263,000 jobs. That’s down sharply from 647,000 in the same period last year – but still a very healthy pace.
Despite a series of mass layoffs in the tech and media industries, Aron-Dine added that there is “no sign of a big increase in unemployment.”
Indeed, initial jobless claims remain very low. The Labor Department said Thursday that first-time claims for unemployment benefits rose just slightly in the latest week and remain near two-month lows. However, some economists – including ones at the Fed – warn this trend could be about to change due in large part to continued pressure from higher borrowing costs.
After raising interest rates for a seventh meeting in a row, the Fed last week projected the unemployment rate will rise from a historically low level of 3.7% today to 4.6% by the end of next year. That implies an increase of approximately 1.6 million unemployed people.
Some, though certainly not all, business leaders and major banks expect the US economy will slip into a downturn next year. For instance, PNC is now projecting a “mild recession” that is similar to the downturns of 1990-1991 and 2001.
“The risk of a recession is elevated right now – certainly higher than six months or a year ago,” Gus Faucher, chief economist at PNC, told CNN. “We need to be prepared for a recession sometime in the spring or summer of 2023.”
Although Fed officials say a soft landing is still possible, some of the Fed’s own metrics are flashing red.
A New York Fed model that uses shifts in the bond market to forecast recession risks finds there is a 38% chance of a recession in the next 12 months. That narrowly surpasses the peak in 2019 and is the highest level since just before the Great Recession.
Asked about the surprise retail sales slump, Aron-Dine noted this metric can experience significant volatility.
“If you look at the data over a more extended period, you’re just not seeing any signs that would make us think that is a significant concern,” she said.
In that effort to transition away from high inflation, Aron-Dine said, the White House continues to evaluate ongoing risks, calling the war in Ukraine “one of the most significant risks that we monitor.”
“I think all year, we’ve seen that there are signs of real strength and opportunities for a successful transition, and that there are significant risks. And so our work, our strategy has been about trying to take advantage of the strengths and mitigates the risk,” she said, later adding, “I think we have reason for optimism, reasons to believe the US economy is well positioned, but there are global challenges and high on that list is potential downstream consequences of the war in Ukraine for food and energy as we saw this year and more generally.”
Another hurdle Biden’s economic team will face in the new year will be achieving consensus among a newly divided Congress.
Biden’s first two years in office were marked by the passage the administration’s proposed major spending bills aimed at bolstering the country’s recovery from the coronavirus pandemic, rebuilding the nation’s infrastructure, overhauling major social safety net programs, enhancing domestic supply chains and making climate investments.
But some major provisions the Biden White House has pushed for, including the revival of the enhanced child credit have failed to move forward in Congress. The previous expansion of the child tax credit lifted 2.1 million children out of poverty in 2021, according to the Census Bureau.
A last-ditch effort this month to pass the credit into law as part of the $1.7 trillion government spending bill failed. And with Republicans taking over the House of Representatives next year, its passage is even less likely.
“It is a disappointment that Republicans blocked inclusion of Child Tax Credit improvements during the lame duck,” Aron-Dine said, adding, “I won’t get ahead of agenda setting our strategy for next year, but of course, this will remain a priority for us.”
Along with broader efforts to tackle inflation and avoid a recession, the implementation of the Inflation Reduction Act will also be top of mind for Biden economic officials in the coming year.
A slate of provisions in the IRA are scheduled to roll out in January, including home energy efficiency tax credits and a $35 cap on the cost of insulin for seniors on Medicare.
And CNN previously reported that along with deploying a messaging strategy aimed at highlighting existing accomplishments, as Biden heads into the new year, the White House is looking to highlight ways the Inflation Reduction Act will lower everyday costs.
Aron-Dine told CNN that the enactment of the IRA “is just going to have a huge effect in shaping our work in the year ahead, with one of our biggest priorities really being just making sure that we fully realize the potential of that law.”
And as the administration prepares to frame Biden’s agenda ahead of the State of the Union address next year, National Economic Council Director Brian Deese told the Wall Street Journal this week that officials are considering a push for policies aimed at getting Americans back to work, including childcare and eldercare benefits.
It’s not clear whether the White House is considering using executive authority or proposals to Congress to move forward on the initiative. Aron-Dine declined to offer specifics.
Twitter has been hit with allegations from 100 former employees affected by mass layoffs at the company, including that it unfairly laid off more women than men, terminated employees who were actively on medical or parental leave and reneged on promises related to severance pay.
The allegations were included as part of the former employees’ demands for arbitration against the company, according to a statement on Tuesday by attorney Shannon Liss-Riordan.
Liss-Riordan is the same attorney who has brought four proposed class action lawsuits against Twitter by former employees affected by Elon Musk’s takeover. The arbitration demands are meant to help workers who can’t participate in that litigation because of contracts they signed with the company.
Claims in the arbitration demands mirror those in the lawsuits. Some also claim that Musk placed “unreasonable demands” on Twitter’s workforce in an effort to shrink its staff, according to the statement.
“The conduct of Twitter since Musk took over is incredibly egregious, and we will pursue every avenue to protect workers and extract from Twitter the compensation that is due to them,” Liss-Riordan said in the statement. She added that her firm has heard from hundreds of former Twitter employees and has filed only the “first wave” of arbitration demands.
“We are ready to fight them one by one, on behalf of potentially thousands of employees if that becomes necessary,” she said.
Liss-Riordan previously brought three proposed class action suits on behalf of female employees, disabled employees and contractors who were laid off. Another suit was filed by a group of former employees who accuse Twitter of breach of contract because it allegedly failed to follow through on promises to allow remote work and provide consistent severance benefits after the acquisition.
Twitter, which recently laid off much of its communications department, did not immediately respond to a request for comment regarding the arbitration demands. Twitter has denied the breach of contract allegations in the lawsuit brought by former employees about remote work and severance, and it has not responded to the claims in the three other suits.
Liss-Riordan has also filed three complaints against Twitter with the National Labor Relations Board on behalf of employees affected by the layoffs.
The mounting claims by former employees come after Twitter terminated about half of its staff in a mass layoff last month shortly after Musk’s takeover. Musk later pushed out hundreds of additional employees, including by requiring them to agree to an ultimatum to work “extremely hardcore” or leave the company.
The former employees suing Twitter scored an early win last week when a judge ruled in favor of their motion ordering the company to alert all laid-off employees of the pending lawsuits before requiring them to sign severance agreements waiving their rights to litigation.
Devin Ryan, JMP Securities senior research analyst, joins ‘Closing Bell’ to discuss Goldman Sachs laying off up to eight percent of the bank’s workers in January.
Ifeoma Ozoma’s path as an advocate for tech workers started with a series of tweets onemorning in June 2020.
It was a few months after she was pushed out from her job at Pinterest, the image-sharing and social media platform. Across the United States, protests and outrage filled the streets after a White police officer in Minneapolis knelt on the neck of George Floyd for more than nine minutes, ultimately killing him.
As companies scrambled to express their solidarity with the Black Lives Matter movement, her former employer released a statement.
“We heard directly from our Black employees about the pain and fear they feel every day living in America,” Pinterest CEO Ben Silbermann said in the statement. “This is not just a moment in time. With everything we do, we will make it clear that our Black employees matter, Black [Pinterest users] and creators matter, and Black Lives Matter.”
Ozoma,the daughter of Nigerian immigrants, said she wasn’t having it. She fired back with a series of tweets accusing the lifestyle company of racism, pay inequity and retaliation.
“I shouldn’t have to share this story in the year of our Lord, 2020 — but here we are,” she tweeted. “I’m an alum of Yale, Google, FB, … etc and recently decided to leave Pinterest, which just declared ‘solidarity with BLM.’ What a joke.”
Ozoma said her tweets broke a nondisclosure agreement she’d signed when she left the company, thrusting her into the spotlight as the latest person to speak up about alleged mistreatment within the male-dominated tech field. While she’d already left her job by then, she risked the reputation she’d built fromyears of work within the industry, she said.
But instead of shrinking from the challenge, she leaned into it.
“My entire career has been in tech and so I was very aware of the costs of speaking up, but I wasn’t afraid of it. I knew that it was what I had to do,” she said. “Fear is something I haven’t really felt since my mom died from a rare cancer when I was in college. The worst thing that could have happened already did … Pinterest could bankrupt me and make it impossible for me to be hired by any other tech companies, but they couldn’t break me. “
Ozoma told CNN her conflict with Pinterest started after she realized she was getting paid less than half what a White male colleague earned for doing the exact same work.
She said she raised her concerns with her employer and gave the company time to address the issues. But in March 2020, she was let go from her job at Pinterest.
“The purpose wasn’t just, ‘let me vent,’” she said of her flurry of tweets in June 2020. “The purpose was, people need to understand that this is what’s happening. And if it happened to me with the public profile that I had within the company and outside of the company, then it can happen to anyone else.”
Two months after Ozoma and another woman of color, Aerica Shimizu Banks, publicly accused Pinterest of racial discrimination, former chief operating officer Francoise Brougher sued the company over gender discrimination and retaliation. Pinterest later agreed to settle the lawsuit for $22.5 million, but did not admit to liability as part of the settlement.
“We want each and every one of our employees at Pinterest to feel welcomed, valued, and respected,” a Pinterest spokesperson said in June. “We’re committed to advancing our work in inclusion and diversity by taking action at our company and on our platform. In areas where we, as a company, fall short, we must and will do better.”
In a separate statement to CNN late last month,Pinterest said it’s launched various diversity and inclusion measures, including pay transparency tools for employees. The company said it’s also taken steps to monitor employee salaries to ensure equal pay for comparable work.
“We have increased the percentage of women in leadership, added board members who are committed to diversity, and we continue to set goals for increasing diversity at the company,” a Pinterest spokespersontold CNN in an email. “We … are committed to ensuring that every employee feels safe, championed, and empowered to raise any concerns about their work experience.”
After Ozoma began tweeting about her experience at Pinterest, direct messages poured in from people facing similar frustrations at other companies, she said. She knew she had to do something about it.
She emerged as a passionate advocate for tech workers by seeking legal protections for whistleblowers.
Pinterest is based in San Francisco. At the time, California’s law offered some protection to employees who broke non-disclosure agreements to speak out about workplace harassment or discrimination based on sex — but not about racial discrimination, Ozoma said.
Ozoma got busy. She began educating whistleblowers on their options, urged tech companies to rethink their policies on nondisclosure agreements and reached out to lawmakers to seek new legislation that would protect employees speaking out on all forms of discrimination.
In California, she worked with state senator Connie Leyva on a law that prevents nondisclosure agreements from being implemented against people speaking out on any workplace discrimination, including race.
“California workers should absolutely be able to speak out — if they so wish — when they are a victim of any type of harassment or discrimination in the workplace,” Senator Leyva said at the time. “It is unconscionable that an employer would ever want or seek to silence the voices of survivors that have been subjected to racist, sexist, homophobic or other attacks at work.”
Ozoma’s advocacy work has given whistleblowers a safe space to go for information.
Around the same time Newson signed the measure into law, she launched a Tech Worker Handbook online to provide free resources for employees seeking information on how to speak out on workplace discrimination and harassment.
“So many people reached out when I told my story, and most of them were tech workers or workers within the tech industry,” she said.
She said she’s recruited dozens of experts and techindustry professionalsto contribute to the site, saying the goal is not to encourage employees to be whistleblowers, but to provide them with information about options if they choose that path.
“I cannot tell someone who is supporting their kids and their partner on their health insurance … go leave your job so that your kids don’t have health insurance, so that you can feel good about speaking up,” she said.
“It’s such an individual decision. If I had kids at the time who are on my health insurance, I probably wouldn’t have said anything.”
Since the site launched, Ozoma said she has received hundreds of inquiries from employees seeking more details on how to disclose and fight discrimination at work. The 30-year-old mentors activists and other people fighting all over the world against workplace discrimination.
Ozoma now runs a tech policy consulting company, Earthseed, and is the director of tech accountability at the new Center on Race and Digital Justice at the University of California, Los Angeles. This year, Time Magazine named her one of its TIME100 Next, a group of emerging leaders who are shaping the future.
Her new role as an advocate is happening hundreds of miles away from the tech world she left behind.
After leaving Pinterest, Ozoma moved to a farm near Santa Fe, New Mexico, where she grows her own vegetables and raises a flock of chickens nicknamed the Golden Girls.
She said she has no plans to go back to Silicon Valley, but will keep fighting for employee rights.
“I’m just working now from a different position on issues that really impact the industry in a way that I feel is additive,” she said.
“I don’t think that there’s anything more fulfilling than being part of the circle of life,” she said, using a metaphor that mirrors her current life on a farm, “whether that’s watching a seed or planting a seed in the ground and watching it grow and create more seeds.”
Britain’s economy is on course to shrink 0.4% next year as inflation remains high and companies put investment on hold, with gloomy implications for longer-term growth, the Confederation of Business Industry forecast on Monday.
“Britain is in stagflation – with rocketing inflation, negative growth, falling productivity and business investment. Firms see potential growth opportunities but … headwinds are causing them to pause investing in 2023,” CBI Director-General Tony Danker said.
The CBI’s forecast marks a sharp downgrade from its last forecast in June, when it predicted growth of 1.0% for 2023, and it does not expect gross domestic product (GDP) to return to its pre-COVID level until mid-2024.
Britain has been hit hard by a surge in natural gas prices following Russia’s invasion of Ukraine, as well as an incomplete labour market recovery after the COVID-19 pandemic and persistently weak investment and productivity.
Unemployment would rise to peak at 5.0% in late 2023 and early 2024, up from 3.6% currently, the CBI said.
British inflation hit a 41-year high of 11.1% in October, sharply squeezing consumer demand, and the CBI predicts it will be slow to fall, averaging 6.7% next year and 2.9% in 2024.
The CBI’s GDP forecast is less gloomy than that of the British government’s Office for Budget Responsibility – which last month forecast a 1.4% decline for 2023.
But the CBI forecast is in line with the Organisation for Economic Co-operation and Development (OECD), which expects Britain to be Europe’s weakest performing economy bar Russia next year.
The CBI forecast business investment at the end of 2024 will be 9% below its pre-pandemic level, and output per worker 2% lower.
To avoid this, the CBI called on the government to make Britain’s post-Brexit work visa system more flexible, end what it sees as an effective ban on constructing onshore wind turbines, and give greater tax incentives for investment.
“We will see a lost decade of growth if action isn’t taken. GDP is a simple multiplier of two factors: people and their productivity. But we don’t have people we need, nor the productivity,” Danker said.
Amazon CEO Andy Jassy on Wednesday said an “uncertain” economy pushed the e-commerce giant to move forward with rare and wide-ranging layoffs after having gone on a significant hiring spree for much of the pandemic.
“We had the lens of a very uncertain economic environment, as well as our having hired very aggressively over the last several years,” Jassy said in an interview at the New York Times DealBook summit on Wednesday. “We just felt like we needed to streamline our costs.”
The remarks came as part of Jassy’s first interviewsince Amazon
(AMZN) confirmed earlier this month it had begun laying off corporate workers, with plans for layoffs to continue into early next year. The company is reportedly planning to cut up to 10,000 employees, though it has not confirmed a figure.
Amazon, more than most tech companies, experienced a staggering pandemic boom as more customers shifted their spending online during the health crisis. Like other tech companies, it has since changed course and begun cutting employees as it confronts a shift in demand as well as rising inflation and recession fears.
“A lot has happened in the last few years that I’m not sure people anticipated,” Jassy said. “You just look in 2020, our retail business grew 39% year-over-year, at a $245 billion annual run rate, which is unprecedented, and it forced us to make decisions in that time to spend a lot more money and to go much faster in building infrastructure than we ever imagined we would.”
“We built a physical fulfillment center footprint over 25 years that we doubled in 24 months,” Jassy said.
Even so, Jassy said he thinks the team “made the right decision” regarding its infrastructure build out. Regarding the hiring spree, Jassy said he now looks at is as a “lesson for everyone.”
“I don’t necessarily think it was the wrong thing to have been doubling down, because we were growing so well and we had so many ideas that we thought were good for customers and good for the business, but I think it’s a good lesson, I think, for everybody,” Jassy said. “When you’re hiring, even when things are going really well, that it’s good to think about if there’s some kind of sudden change, even one that you just have a little bit of a hard time imagining. Would you like the incremental headcount that you’re adding at that time, or do you want to be a little bit more conservative?”
Despite the landmark union victory in April, Amazon has so far refused to formally recognize the grassroots worker group known as the Amazon Labor Union, or come to the bargaining table. The company has aggressively pushed back against the workers’ victory through the National Labor Relations Board (NLRB).
While the NLRB battle indicates the labor union is on the cusp of being certified, Jassy suggested Amazon’s legal battle with the worker group isn’t done yet. He said there “were a lot of irregularities in that vote,” which is why the company filed objections with the NLRB. (Amazon’s objections were previously rejected by an NLRB hearing officer.)
Jassy also emphasized that the last two Amazon union elections held resulted in workers voting not to unionize, and thatAmazon prefers to have a direct relationship with fulfillment center workers rather than going through unions.
“In my own opinion on where we are with that legal process is that we’re far from over with it,” Jassy said. “I think that it’s going to work its way through the NLRB, it’s probably unlikely the NLRB is going to rule against itself, and that has a real chance to end up in federal courts.”
In an interview with CNN Business ahead of Jassy’s remarks, Amazon Labor Union President Chris Smalls slammed that Jassy “even had the audacity to feel comfortable to come to New York City knowing that we haven’t negotiated anything yet.”
“We definitely want to take this opportunity to let him know that the workers are waiting and we are ready to negotiate our first contract,” he added of the demonstration, which he called a “welcoming party” for Jassy.
Smalls said he’s been contacted by a few laid-off Amazon employees in corporate roles, who have since grown interested in the protections of unions. “I tell them — you may have good salary, you may have good perks, you may got good stocks and benefits, obviously better than warehouse workers, but at the end of the day, you’re still an at-will employee,” Smalls said.
“I explained to them, the one building that can’t be touched right now by mass layoffs is JFK8 Staten Island,” he said. “I encourage them to do what they have to do, if that means form a union, so be it, we support it.”
With the Labor Department on Friday reporting stronger November job numbers than expected, the Federal Reserve could react with yet another interest rate hike in an effort to curb inflation. Skyler Henry has the details.
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The November jobs report released by the Labor Department Friday showed that 263,000 new jobs were added last month, and the unemployment rate remains at 3.7%. The strong labor market comes amid a flurry of recent interest rate hikes. CBS News business analyst Jill Schlesinger discussed the impact of the latest numbers, and provided some tips on avoiding financial missteps heading into 2023.
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The Labor Department’s November jobs report showed the U.S. gained 263,000 jobs last month. But fears about inflation and a possible recession remain. Meg Oliver reports.
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U.S. employers added 263,000 jobs in November, continuing a surprisingly strong pace of expansion this year despite the Federal Reserve’s efforts to put the brakes on the labor market.
The unemployment rate stayed level at 3.7%, the U.S. Bureau of Labor Statistics said Friday. Economists surveyed by data provider FactSet had predicted employers added 200,000 jobs last month.
Job growth was broad-based, with employers in health care, government and leisure and hospitality adding jobs. The information sector grew modestly, despite widespread layoffs among tech companies. While the hiring bodes well for job hunters, the stronger-than-expected report complicates the Federal Reserve’s efforts to tamp the hottest inflation in four decades, raising fears of more rate hikes to come.
“Even if the central bank eases up as expected on the magnitude of rate increases, the journey likely continues in 2023 toward a higher ultimate rate destination in the pursuit of restraining inflation,” said Mark Hamrick, senior economic analyst at Bankrate, in a Friday note.
Stock markets plummeted on the report, with Dow futures down by 1.2% and S&P 500 futures down 1.5%. Investors believe that too-strong hiring could encourage the Fed to raise interest rates even higher.
Staffing up to meet demand
The stronger-than-expected hiring reflects that employers are still seeking to fill roles as the labor market continues to recover from the pandemic, economists and labor experts said.
“Another strong jobs report reflects what’s plain to see in the economy: more than 10 million job openings and many industries, such as health care and education, are still working to fill out their ranks to minimum, pre-pandemic levels,” Robert Frick, corporate economist at Navy Federal Credit Union, said in a note.
He added, “Also, industries such as leisure and hospitality need to staff up to meet consumer demand.”
Retail, transportation and trade lost jobs, reflecting a broader shift away from goods-producing sectors of the economy toward service-oriented sectors that suffered the biggest contraction in the pandemic.
Participation, or the measure of people actively working or looking for work, also dropped — a worrying trend for those who have been hoping that strong hiring would pull people off the sidelines and into the job market.
“The issue that we have is, we’re not at the level, [in terms of] the actual the size of the labor force that we should be,” Giacomo Santangelo, economist at the job site Monster, told CBS MoneyWatch this week before Friday’s report was issued. With the population aging and immigration to the U.S. on the decline, the labor force is projected to grow at a diminished rate in the near future — keeping the job market tight.
Wages jump
Wage growth also surged, with average pay increasing 5.1% over the last 12 months — still below the rate of inflation, but much higher than the Federal Reserve wants to see as it tries to cool the economy.
Job growth has slowed this year, from an average of 570,000 a month in the first three months of the year to about 270,000 over the most recent three months. But the Federal Reserve is looking for a much more pronounced slowdown, as it believes that a too-tight labor market is contributing to high inflation, despite little evidence that wages are pushing up prices.
WASHINGTON — For nearly nine months, the Federal Reserve has relentlessly raised interest rates to try to slow the U.S. job market and bring inflation under control.
And for just as long, the job market hasn’t seemed to get the message.
The November employment report the government issued Friday was no exception. Employers added 263,000 jobs — a substantial gain that was far above economists’ expectations. Wages rose robustly, too, further intensifying the inflationary pressures the Fed has been struggling to contain.
And the unemployment rate remained at 3.7%, barely above the half-century low of 3.5%.
Friday’s hiring data left economists scratching their heads over the job market’s resilience and the continuing need of many employers for more workers.
“The Fed is tightening monetary policy, but somebody forgot to tell the labor market,’’ said Brian Coulton, chief economist at Fitch Ratings.
The Fed’s inflation challenge began after the economy roared back from the pandemic recession two years ago, causing vast shortages of goods and sending prices soaring. After assuming — falsely — for months that high inflation would prove short-lived, the Fed finally began raising its key short-term rate in March this year.
Since then, its rate hikes have been recurrent and aggressive. The Fed has raised its benchmark rate six times, including four straight increases of three-quarters of a point — far larger than the usual quarter-point hikes. Later this month, it’s expected to raise its key rate by an additional half-point.
Because the Fed’s rate affects borrowing rates across the economy, its hikes have had the effect of making loans much costlier for consumers and businesses. The idea is that individuals and companies would then cut back on borrowing and spending, and employers would slow their hiring.
But the economy — and especially the job market — have proved surprisingly durable in the face of the Fed’s anti-inflation campaign, a fact underscored by Friday’s strong jobs numbers.
The central bank’s goal is to achieve 2% annual inflation. It has a long way to go, to say the least: The most recent inflation report showed consumer prices up 7.7% from a year earlier.
Here are five takeaways from the November jobs report:
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TOO HOT FOR THE FED
Last year, the economy added a record 6.7 million jobs, and it tacked on an average of 457,000 a month more from January through July this year. Since then, hiring has cooled, to a monthly average of 277,000 from August through November. Yet it’s still running way too hot for the Fed’s inflation fighters and is consistently beating forecasters’ expectations.
With nearly two job openings for every unemployed American, companies are struggling to find workers and retain the ones they have. A tight job market tends to keep upward pressure on wages and to feed into inflation.
“This is another solid report that shows just how difficult it is going to be for the Fed to get inflation back to target,’’ economists Thomas Simons and Aneta Markowska of the investment banking firm Jefferies wrote in a research note Friday.
————
RISING WAGES
Average hourly earnings rose 0.6% from October to November — the strongest month-to-month gain since January. And measured over the past 12 months, average pay was up a more-than-expected 5.1%,
“We had been hoping to see a clear softening,’’ said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Hourly pay gains were especially strong in November for workers in retail, transportation and warehousing and “information,’’ a category that includes some technology jobs.
“Wage growth is likely to continue to remain elevated until we see a meaningful normalization in labor demand,’’ said Thomas Feltmate, senior economist at TD Economics.
————
HELP WANTED: RESTAURANTS AND BARS
Restaurants and bars added 62,000 jobs last month. The healthcare industry took on a net 45,000 new workers in November. That sector has been adding 47,000 jobs a month this year, up from an average of just 9,000 a month in 2021.
Factories added 14,000 jobs in November. That gain occurred even though an index issued by the Institute for Supply Management showed that U.S. manufacturing activity fell last month for the first time since May 2020, when the economy was reeling from the COVID-10 outbreak.
Last month, the economy also added 20,000 construction workers. But in a sign that higher interest rates are squeezing the housing market, the number of employees at homebuilding companies actually fell in November by 2,600.
————
MISSING WORKERS
The number of people who either have a job or are looking for one — the total labor force — declined by 186,000 in November. It was the third straight monthly drop.
The figure remains slightly below where it stood in February 2020, just before COVID slammed into the U.S. economy. The proportion of the adult population in the labor force — the participation rate — amounted to 62.1% last month, well below the pre-pandemic 63.4%.
The shortfall in available workers has been caused by a combination of early retirements, reduced immigration, COVID-19 deaths and a shortage of affordable child care. The shortage represents a setback in the fight against inflation: If employers had more workers to choose from, they would be under less pressure to bid up wages and thereby contribute to inflation pressures.
————
TWO SURVEYS, TWO STORIES
Friday’s report sent some mixed signals about the level of employment in the United States.
The Labor Department’s survey of businesses delivered the headline number of 263,000 added jobs. But the department also surveyed households, and they told a different story: The number of people who said they had a job fell by 138,000 in November after having dropped by 328,000 in October.
The survey of businesses, called the “establishment survey,” tracks how many jobs are added across the economy. The separate survey of households is used to calculate the unemployment rate.
The two surveys sometimes tell different tales, as they did in October and November, though the disparities tend to even out over time.
For its establishment survey, the department asks mostly large companies and government agencies how many people they had on their payrolls.
For its household survey, it asks households whether the adults living there have a job. Those who don’t have a job but are looking for one are counted as unemployed. Those who aren’t working but aren’t seeking work are not counted as unemployed.
Unlike the establishment survey, the household survey counts farm workers, the self-employed and people who work for new companies. It also does a better job of capturing small-business hiring.
But the results of the household survey are likely less precise. The government surveys just 60,000 households. By contrast, it surveys 131,000 businesses and government agencies for the establishment survey.
Job growth was much better than expected in November despite the Federal Reserve’s aggressive efforts to slow the labor market and tackle inflation.
Nonfarm payrolls increased 263,000 for the month while the unemployment rate was 3.7%, the Labor Department reported Friday. Economists surveyed by Dow Jones had been looking for an increase of 200,000 on the payrolls number and 3.7% for the jobless rate.
The monthly gain was a slight decrease from October’s upwardly revised 284,000. A broader measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons edged lower to 6.7%.
The numbers likely will do little to slow a Fed that has been raising interest rates steadily this year to bring down inflation still running near its highest level in more than 40 years. The rate increases have brought the Fed’s benchmark overnight borrowing rate to a target range of 3.75%-4%.
In another blow to the Fed’s anti-inflation efforts, average hourly earnings jumped 0.6% for the month, double the Dow Jones estimate. Wages were up 5.1% on a year-over-year basis, also well above the 4.6% expectation.
The Dow Jones Industrial Average fell more than 200 points after the report as the hot jobs data could make the Fed even more aggressive. Treasury yields jumped after the news, with the two-year note, the most sensitive to monetary policy, up more than 10 basis points to about 4.36%.
“To have 263,000 jobs added even after policy rates have been raised by some [375] basis points is no joke,” said Seema Shah, chief global strategist at Principal Asset Management. “The labor market is hot, hot, hot, heaping pressure on the Fed to continue raising policy rates.”
Leisure and hospitality led the job gains, adding 88,000 positions.
Other sector gainers included health care (45,000), government (42,000) and other services, a category that includes personal and laundry services and which showed a total gain of 24,000. Social assistance saw a rise of 23,000, which the Labor Department said brings the sector back to where it was in February 2020 before the Covid pandemic.
Construction added 20,000 positions, while information was up 19,000 and manufacturing saw a gain of 14,000.
On the downside, retail establishments reported a loss of 30,000 positions heading into what is expected to be a busy holiday shopping season. Transportation and warehousing also saw a decline, down 15,000.
The numbers come as the Fed has raised rates half a dozen times this year, including four consecutive 0.75 percentage point increases.
Despite the moves, job gains had been running strong this year if a bit lower than the rapid pace of 2021. On monthly basis, payrolls have been up an average of 392,000 against 562,000 for 2021. Demand for labor continues to outstrip supply, with about 1.7 positions open for every available worker.
“The Fed is tightening monetary policy but somebody forgot to tell the labor market,” said Fitch Ratings chief economist Brian Coulton. “The good thing about these numbers is that it shows the U.S. economy firmly got back to growth in the second half of the year. But job expansion continuing at this speed will do nothing to ease the labor supply-demand imbalance that is worrying the Fed.
Fed Chairman Jerome Powell earlier this week said the job gains are “far in excess of the pace needed to accommodate population growth over time” and said wage pressures are contributing to inflation.
“To be clear, strong wage growth is a good thing. But for wage growth to be sustainable, it needs to be consistent with 2 percent inflation,” he said during a speech Wednesday in Washington, D.C.
Markets expect the Fed to raise its benchmark interest rate by 0.5 percentage point when it meets later this month. That’s likely to be followed by a few more increases in 2023 before the central bank can pause to see how its policy moves are impacting the economy, according to current market pricing and statements from several central bank officials.
Powell has stressed the importance of getting labor force participation back to its pre-pandemic level. However, the November reports showed that participation fell one-tenth of a percentage point to 62.1%, tied for the lowest level of the year as the labor force fell by 186,000 and is now slightly below the February 2020 level.
Warning: This story contains details of sexual assault.
Listen to this story:
Uyo, Nigeria – When Blessing* boarded a bus early on a January morning in 2017 for the 60km (37 miles) journey from her home in Calabar, in Nigeria’s Cross River State, to a village in neighbouring Akwa Ibom State, she thought she was going to meet a corporate executive about a potential job offer.
The 10-hour ordeal that followed still haunts her, years later.
It all started with a job posting on Jiji, an online trade platform, in December 2016.
At the time, Blessing was 24 years old. She had just finished a diploma course and was planning to begin university the following year. But first, she needed to save money for her fees and living expenses. And that meant finding a job.
Like many other young Nigerians seeking employment in the digital age, Blessing made a social media post in search of job offers, leaving her contact information so that prospective employers could reach her.
A few weeks later, she got a call from a man who told her there was an opening for an entry-level role at ExxonMobil, an American oil and gas company with a drilling licence in Nigeria. He asked that she bring a hard copy of her ID to an address in the neighbouring state to continue the application process.
She had doubts but hoped her weeks of job hunting were finally about to pay off.
“I told [the man] that I wasn’t comfortable [travelling so far to meet him], being that I don’t know him. But he insisted that I didn’t have a choice. And I was desperately in need of a job at that time,” Blessing, who is now 30, recalls.
When she told her mother about the call, she too tried to persuade the man that Blessing could simply scan her ID and email him a copy of it, instead of travelling across states. But the man insisted, so Blessing’s mother borrowed the money for her bus fare.
‘Beware of dogs’
After four hours on the bus, Blessing arrived in the town of Uyo in Akwa Ibom State at 10am.
“When I got there, I called him. He sent me the location [an address in the village] via SMS. He told me to take a taxi to Oron road, then I should take a [motorcycle taxi] and look for a house with [a] ‘beware of dogs’ [sign],” she says.
The road to the village of Nung Ikono Obio is untarred and lined by thick vegetation on both sides. When she saw the condition of the road, Blessing contemplated turning back but reasoned that she had already spent too much on travel.
“I did not want to go home without feedback [for my mother],” she recalls.
[Jawahir Al-Naimi/Al Jazeera]
But when Blessing arrived at the house with the “beware of dogs” sign, she was shocked by what she saw. It was the site of ongoing construction; outside, labourers were moving sand from a heap to mix concrete which they used for the foundation.
The man she had been speaking to on the phone also surprised her – he looked too young to be a corporate executive. It later turned out that he was just 16.
Blessing says he asked her to sit on a bench and wait for his father, who would discuss the job offer with her. Meanwhile, the labourers continued working around her.
“There were people working so I did not suspect anything,” she recalls. “At about 2 o’clock, I became uncomfortable because time was running fast and I was supposed to be heading back to Calabar.”
The boy told her not to worry, that they would leave as soon as he had paid the labourers.
But at 5pm, when the labourers left, the boy locked the gate, and Blessing was left alone with him inside the compound. When she protested, he threatened to kill her and demanded that she enter a nearby room.
She describes what happened next. “He told me to obey him and not hesitate, otherwise he would hurt me and no one would come to my rescue. The room was so dark but there was a small mattress. He told me to sit on it. He told me to undress. That was when I started pleading.”
Blessing started crying. She told him that she did not want the job any more.
“He brought out a knife tied with red cloths and [said] that if I did not undress, he would stab me.”
Then he raped her.
Rape and murder
In August this year, Uduak “Ezekiel” Akpan, now 22, was found guilty of raping and murdering Iniubong Umoren, a 26-year-old job seeker, in April 2021. After Umoren’s case started trending on social media, Blessing saw posts and realised the attacker was the same man who had raped her in 2017.
Like Blessing, Umoren had made an open call on social media for a job. “#AkwaIbomTwitter please. I’m really in need of a job, something to do to keep my mind and soul together while contributing dutifully to the organization. My location is Uyo. I’m creative, really good at thinking critically, and most importantly a fast learner. CV available on request,” she tweeted on April 27, 2021.
As with Blessing, Akpan had then lured her to his home – the same one, still under construction all these years later – under the pretext of a job interview.
While there, Umoren sent a one-second WhatsApp audio message to her friend Uduak Obong. When Obong called her back, she heard her friend’s screams. So she sent a frantic tweet suggesting Umoren might be in danger. Online, Nigerians began investigating. Within a few hours, they found Akpan’s Facebook pages and dug up his digital footprint. A Twitter user got a leak of Akpan’s call log. With the call logs, he geolocated where Akpan was when he had last called Umoren’s phone.
The following day, Umoren’s body was found in a shallow grave in the same compound in Nung Ikono Obio where Blessing had been raped years earlier.
After Akpan attacked Blessing, she was too traumatised to report it. She did not even tell her mother what had happened. But she did go to the hospital to get tested for sexually transmitted diseases.
Blessing came forward after Umoren’s death, and prosecutors called her to give evidence against Akpan at his trial. Although she did not end up testifying – she was told her testimony was no longer needed – she sees her decision as a first attempt at seeking justice for what happened to her.
In the statement Akpan gave to the police before his trial commenced – a confession he later tried to recant, saying it was obtained under duress, although the judge ruled against him – he admitted to having attacked six other women, including Blessing. Umoren was the only one he killed.
[Jawahir Al-Naimi/Al Jazeera]
Multiple victims
Twenty-five-year-old Miriam Akpan (no relation to the perpetrator) was one of Akpan’s other victims. In December 2020, desperate for a job, she posted on a Facebook group called Job Vacancy in Uyo, advertising her interests and qualifications.
“Please, anything, I can do,” she wrote, mentioning that she had the equivalent of a high school certificate and would take any job. No one offered her one until Akpan said he would pay her 35,000 Nigerian naira ($80) a month as a secretary in an “integrated farm”. Miriam was excited. For someone without a university degree, a job that paid more than the minimum monthly wage of 30,000 naira ($69) felt like a great opportunity.
She agreed to meet him to discuss the details of the job offer. But instead of an interview, she was drugged and raped.
For more than a year Miriam had suppressed the memory of what happened to her. She kept it from her sister, the only immediate family she has. But as people tried to locate Umoren, she saw Akpan’s picture being shared on Twitter and all the emotion she had tried to bury came rushing back. “I did not even think about it, I just commented [on Twitter] that this person robbed me last December,” she says.
But her last name raised suspicions, and some accused her of being related to Uduak Akpan. Umoren’s relatives did not immediately trust her when she advised them to go to Akpan’s house that night to search for the missing woman.
The following day, Miriam’s directions led the police and Umoren’s relatives to the compound where they found her body.
Miriam’s court testimony also helped convict Akpan.
He was subsequently sentenced to death by hanging for the murder of Umoren, and life imprisonment for her rape.
Soaring unemployment
But Akpan is not the only person to have taken advantage of Nigeria’s employment crisis.
It is common for Nigerians to announce on social media that they are seeking jobs. With a soaring unemployment rate, many explore unconventional ways of finding work. Graduates are sometimes seen holding placards at major bus stops and expressways pleading for jobs; others make online banners; and members of the National Youth Corps who finish their service also post their certificates on social media, announcing that they are ready for employment.
Nigeria’s unemployment rate stands at 33.3 percent, according to data from the National Bureau of Statistics, which means that more than 23 million people either have no job or work for less than 20 hours a week. Among those aged between 15 and 35, the unemployment rate stood at 42.5 percent in 2020.
[Jawahir Al-Naimi/Al Jazeera]
The high number of unemployed people seeking jobs also makes Nigeria’s labour market a “breeding ground” for criminals who lure applicants in with job interviews, said Taibat Hussain, a youth and gender equality advocate. “Criminals … lure applicants in with fake job interviews, and then rob, rape and, in extreme cases, kill them. This category of youth, after spending years without employment opportunities, falls prey to the tactics and is left with no other choice than to give in,” she told Al Jazeera.
As part of reporting this story, Al Jazeera met a 26-year-old man arrested in Cross River State for the alleged rape of an 18-year-old woman to whom he had promised a job. We are not naming him as he is awaiting trial.
When Al Jazeera met him at Calabar Correctional Centre, he was wearing a blue shirt with its collar raised and a pair of too-small slippers. He had already been behind bars for more than a year. He told Al Jazeera he had slept with the woman but denied raping her. “I was going to help her get the job but she is angry because the job did not come as fast as she wanted,” he said.
But in a statement the woman gave to the police detailing her experience, she told a different story. She met the man while looking for work vacancies, she said. He told her there was a cleaning position open in his workplace – a manufacturing company in Calabar.
“He asked me to bring my application to his house so that he can help me correct it and submit [it]. He looked at my application and said it is not correct. He wrote another one and told me to recopy it with my handwriting. After I finished copying it, I wanted to go but he did not let me go. He started kissing me and touching my breast. He used his right hand to hold my hands together and his left hand to cover my mouth,” her statement in the police report reads.
Experts say that most victims of dubious employment scams are younger women seeking low-skilled jobs, who make up a significant number of the unemployed population, according to the National Bureau of Statistics.
Extorted by ‘jobs for sale’
While predators like Akpan take advantage of desperate job seekers, there are registered companies that also extort these desperate people in other ways.
Oladeinde Olawoyin, a Nigerian journalist who has investigated fake employment agencies, found 50 cases of applicants being extorted. These agencies get applicants to pay for a registration package – usually charging 5,000-10,000 naira ($11-23) – with the promise of finding them a job, yet most never do. Some of these companies are registered as consultancies to circumvent the law that makes it illegal for a person to pay to gain employment, Olawoyin explains.
“Many of the agencies do not have jobs to give,” he says. “They charge applicants for registration forms and don’t really get them any job. There are a few who might have [a] few jobs but they recruit more people than the [number of] job[s] they have. In a pool of about 1,000, they might throw in maybe 20 jobs or less.
“These agencies know that Nigeria is [a] free for all. So they … gamble with people’s life and extort them. Most often they change their location when their notoriety spreads. They change their name and location. So it is possible that a job seeker might get scammed two, three, or four times by the same set of people with different names and addresses.”
John Nyamani, the director of employment and wages at Nigeria’s Ministry of Labour, told Al Jazeera that “desperation”, social media and job seekers wanting a quick fix were to blame for people being preyed upon.
“We don’t want to follow the rules because we are in a hurry to get employment,” he said.
Nyamani advised job seekers to be circumspect of opportunities advertised on social media that cannot be traced to an established organisation. “They are deceived with jobs and it is because of the situation of things. The government can only try its best through the security agencies to educate people on how to be careful. Not every advert you see on social media [is one] that you respond to. If you have to respond to it, make clarifications, and ask the Ministry of Labour. The Ministry of Labour has a good, functional website,” he added, referring to the National Employment Electronic Labour Exchange (NELEX).
The website has a pool of vacancies and a list of legal organisations where Nigerians seeking employment can carry out background checks on their prospective employers, Nyamani said.
However, advocate Hussain, who has looked into the government’s youth unemployment reduction scheme, says such initiatives only provide “temporary relief”, and that there is a need for permanent and sustainable connections between the labour market and government initiatives that hope to help young people.
For many, Umoren’s death highlighted how dire the unemployment situation is in Nigeria, and the risks young people are willing to take to find a job.
Miriam has gone back to school where she is learning to become a data scientist. She said facing Akpan again was one of the toughest things she has ever done but, after the incident, she decided to relocate to Lagos to start afresh.
“I have left Uyo and everything else behind me,” she says. “I can now build a future that I want. I bought a laptop. I am going to start learning how to code.”
For Blessing, it has been harder. She will only feel that there has been justice when Akpan hangs, she says, adding: “I don’t think he will ever be killed.”
The number of Americans applying for unemployment benefits rose to the highest level since August, although it remains low by historic standards.
Some 240,000 people applied for jobless aid last week, up by 17,000 from the week before, the Labor Department reported Wednesday. The four-week moving average of claims, which smooths out week-to-week volatility, rose by 5,500 to 226,750.
Applications for unemployment benefits are a proxy for layoffs. While job cuts remain low by historic levels, that may change as the Federal Reserve hikes interest rates to cool inflation.
The Fed has already raised its benchmark interest rate six times since March, dragging down stock valuations and leading the housing market to buckle under the strain of mortgage rates that have doubled from a year ago. Many economists expect the United States to slip into a recession next year as higher borrowing costs slow economic activity.
In recent weeks, major tech companies including Amazon, Meta, Snap, HP and Twitter are cutting tens of thousands of employees as they adjust to a slower-growth environment. A continuing hiking campaign from the central bank could lead to even more cuts in the previously fast-growing sector.
“All companies benefit from low borrowing costs, but tech in particular has benefited from low borrowing costs because so much of their revenue is projected in the future. They’re growth companies,” said Nela Richardson, chief economist at ADP, the payroll processor.
She added, “Technology companies represent just 2 percent of U.S. employment, so while technology layoffs affect individual companies and their workers, the sector’s employment writ large is a very small percentage of the overall job market.”
Hiring overall has remained solid, with employers adding 261,000 jobs last month and are creating an average of nearly 407,000 a month this year — on pace to make 2022 the second-best year for hiring (after 2021) in government records going back to 1940. There are nearly two job openings for every unemployed American. The unemployment rate is 3.7%, a couple of ticks above a half-century low.
New weekly applications for unemployment benefits were extremely low early this year — staying below 200,000 for much of February, March and April. They began to tick up in late spring and hit 261,000 in mid-July before trending lower again.
“We expect layoffs to rise as demand softens in response to higher interest rates,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in a research report. “However, the move is likely to be gradual given businesses are still struggling with labor shortages and will be reluctant to cut their workforce.”
The Labor Department said Wednesday that 1.55 million people were receiving jobless aid the week that ended Nov. 12, up by 48,000 from the week before.
The computer maker disclosed the major job cuts in a statement accompanying its lackluster quarterly earnings report on Tuesday afternoon, where it also said sales dropped more than 11% compared to the same period last year.
“The company expects to reduce gross global headcount by approximately 4,000-6,000 employees,” HP said. “These actions are expected to be completed by the end of fiscal 2025.”
HP President and CEO Enrique Lores added in a statement that the company’s so-called “Future Ready strategy” will “enable us to better serve our customers and drive long-term value creation by reducing our costs and reinvesting in key growth initiatives to position our business for the future.”
Laid-off employees at Twitter’s Africa headquarters are accusing Twitter of “deliberately and recklessly flouting the laws of Ghana” and trying to “silence and intimidate” them after they were fired.
The team has hired a lawyer and sent a letter to the company demanding itcomply with the West African nation’s labor laws, provide them with additional severance pay and other relevant benefits, in line with what other Twitter employees will receive.
They have also petitioned the Ghanaian government to compel Twitter to “adhere to the laws of Ghana on redundancy and offer the employees a fair and just negotiation and redundancy pay,” according to a letter to the country’s Chief Labour Officer obtained by CNN.
“It is clear that Twitter, Inc. under Mr Elon Musk is either deliberately or recklessly flouting the laws of Ghana, is operating in bad faith and in a manner that seeks to silence and intimidate former employees into accepting any terms unilaterally thrown at them,” the letter states.
Twitter laid off all but one of the African employees just four days after the company opened a physical office in the capital Accra following Musk’s takeover. But the staff of about a dozen were not offered severance pay, which they say is required by Ghana’s labor laws, based on their employment contracts. They also claim they were not informed about the next steps — unlike employees in the United States and Europe — until a day after CNN reported on their situation.
CNN contacted Twitter for comment but received no response.
In the letter to Twitter Ghana Ltd, obtained by CNN, the African employees rejected a “Ghana Mutual Separation Agreement” from Twitter, which they say was sent to their personal emails offering final pay thatthe company claims to have been arrived at after a negotiation.
Several members of the team and their lawyer told CNN that there was no such negotiation on severance pay. They claim it was below what is required by law and contradicts what Musk tweeted that departing employees would receive.
“Everyone exited was offered 3 months of severance, which is 50% more than legally required,” Musk tweeted. Twitter informed the Ghana-based employees in early November that they would be paid until their last day of employment — December 4. And they will continue to receive full pay and benefits during the 30-day notice period.
“It was very vague, did not talk about outstanding leave or paid time off, and just asked us to sign if we agree. I never bothered to go back to the document because it is rubbish and is still in violation of labor laws here,” one former employee told CNN on condition of anonymity.
The Accra-based team accuses Twitter of dealing with them in bad faith, not being transparent, and discriminating against them compared to laid-off employees in other jurisdictions.
“The employees are distressed, humiliated, and intimidated by this turn of events. There are non-Ghanaian employees, some with young families, who moved here to take up jobs and have now been left unceremoniously in the lurch, with no provision for repatriation expenses and no way to communicate with Twitter, Inc. and discuss or plead their case,”the notice to Ghana’s Chief Labour Officer says.
Their attorney, Carla Olympio, says the sudden termination of almost the whole team violated Ghanaian employment law because it is considered a “redundancy” which requires three-month notice to authorities and a negotiation on redundancy pay.
“In stark contrast to internal company assurances given to Twitter employees worldwide prior to the takeover, it seems that little attempt was made to comply with Ghana’s labor laws, and the protections enshrined therein for workers in circumstances where companies are undertaking mass layoffs due to a restructuring or reorganization,” she wrote in a statement to CNN.
The employees said in their appeal to Ghana’s Chief Labour Officer that Twitter’s formal entry into the continent started with “great fanfare and with the support of the government,”and they expect similar attention to their plight now.
They are demanding 3 months’ gross salary as severance pay, repatriation expenses for non-Ghanaian staff, vesting of stock options provided in their contracts, and other benefits such as healthcare continuation that were offered to staff worldwide.
CNN has reached out to Ghana’s Employment and Labor Relations ministry for comment.
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