Fri, 01 Dec 2023

US employers predict cooling job market

Robert Besser
04 Jul 2022, 02:55 GMT+10

WASHINGTON D.C.: In a cardboard box factory outside Baltimore, people have been walking into the office of Paul Centenari, chief executive of Atlas Container Corp., asking for jobs, something he has not seen in over a year.

"We did not see that a month ago. Labor is still tight, but it is loosening up a little bit," Centenari said, as quoted by Reuters.

U.S. Labor Department data released last week showed that the number of people claiming unemployment benefits remained near its lowest in decades.

In a report, payroll provider UKG stated that even as the Federal Reserve Bank lifted interest rates and some economists began warning of a potential recession, the U.S. job market has gained ground in the first half of this month.

But other signs point toward softening, including high-profile layoff announcements in sectors such as technology and housing.

This week, electric vehicle manufacturer Tesla laid off 200 employees working on its Autopilot driver-assistant system, after CEO Elon Musk told managers the company needed to cut staff by some 10 percent.

Also, JPMorgan Chase & Co started letting go of employees in its mortgage business.

At the same time last week, FedEx CEO Raj Subramaniam said he believes the worst of the company's labor problems are over.

"Although wages remain higher than this time last year, they are stabilizing," Subramaniam said during an earnings conference call with analysts, adding that the company now seeks to retain staff and utilize technology to better manage labor.

During the COVID-19 pandemic, with so many workers quitting or changing jobs, leading the period to be dubbed the "Great Resignation," staff shortages became a part of the U.S. employment market.

Chief executive of machinery manufacturer Vermeer Corp. in Pella, Iowa, Jason Andringa, said he expects the job market to loosen up in coming months, adding that the Fed's aggressive interest rate hikes have already cooled demand in a part of his business linked to the housing and consumer markets.

"It definitely feels as though the labor market will not be as frothy as it was just a few weeks ago," he said, according to Reuters.

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