In fact, the economy in early 2023 is not being roiled by layoffs — which are currently abnormallycompared to historical standards. This means the labor market remains really tight, despite arguments to the contrary. As a result, hiring will remain tough, and it may even mean central banks will have to keep interest rates higher for longer.
I had plenty of time to think about these headlines on a recent business trip back from Atlanta. I was standing in the airport security line for TSA PreCheck. The line would pre-pandemic take well under 5 minutes, but here I was standing 40 minutes later as the airport only had enough personnel to cover two out of the dozen or so idle scanners.
I decided to take a look at the macro trends to answer these questions. The Bureau of Labor Statistics has tracked the share of the labor force being laid off any given month since the end of 2000. In a typical month about 1.5 percent of the non-farm private labor force is laid off or discharged from their job. If this number approaches 2.0 percent or above, I would call it an employer’s market and if it approaches 1.0 percent, a candidate’s market or a tight labor market.
. This indicator is still high compared to pre-pandemic levels, but it has cooled off compared to the year prior. None of this is to say that labor market won’t slightly cool off at some point soon. The Fed has signaled that it will keep interest rates high until inflation cools off and higher interest rates will soften demand in other economic sectors. Eventually, lower demand in the economy will lead to a softer labor market. But don’t expect a redo of the 2008 employer’s market anytime soon.
Just don't pay them