Who Is Hiring – The Industries Keeping the Job Market Healthy
Since the fall of last year, companies across tech, the biggest industry in the world, made headlines over mass layoffs, totaling over 120,000 job cuts throughout 2022. Now in 2023, there have been upwards of another 94,000 workers that have been laid off in U.S.-based tech companies. Despite these numbers that continue to make the front of several news outlets, one piece of economic data still remains strong, influencing the incoming plan-of-actions by the Federal Reserve. That measure is unemployment, which currently, is it at its lowest level since 1970. How can the labor market be so robust in the face of hundreds of thousands of job cuts in tech? The short answer is Covid-19, specifically the sectors that were most largely impacted during the pandemic.
Now, in most parts of the world, Covid-related restrictions have been lifted across the board, allowing several industries to create a resurgence of their standard business operations. The industries that have accelerated their hiring the most has been leisure and hospitality. Restaurants, hotels, and bars across the nation have been able to offset the depleted workforces in tech, creating a 53-year low rate in unemployment. In 2022 alone, leisure and hospitality added almost 80,000 jobs per month, and set 2023 off to a hot start by adding almost 130,000 jobs in January alone. This, along with other recovering sectors, contributed to the hotter-than-expected 517,000 added jobs in January. Both the payroll report and unemployment rate for January shifted market momentum downward, as a few Fed officials hinted at an aggressive interest rate hiking cycle to continue in the former part of 2023. This week, American citizens are readily anticipating the same reports, however, for the month of February. Investors should closely monitor the job openings for January releasing Wednesday, and the nonfarm payrolls and unemployment rate for February releasing on Friday.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.