Welcome back to closing bell and cheddar news. Everyone
. I'm kristen schiller down here on the floor of
the stock exchange and the october jobs report was released
earlier today, giving a final glimpse of the state
of hiring wages and unemployment before the midterms next week
. The US economy adding 261,000 nonfarm jobs in october
with the unemployment rate rising a bit to 3.7% still
historically low joining me now is Andrew challenger senior vice
president at outplacement firm Challenger Gray and christmas, thank
you so much for coming on the show. A
pretty positive report. Certainly better than expected. What
was your takeaway? Yeah, thanks for having me
. It was a pretty strong report beat a lot
of economists expectation on how many jobs would be added
to the economy. And it's a sign that the
labor market remains resilient despite the Fed continuing to increase
interest rates to try to slow down the economy.
I would say we have seen a slight slowdown from
reports we were seeing a few months ago, I
think there are enough signs out there to say that
we've probably hit an inflection point. We're start to
move towards a cooler and cooler labor market. But
this job market, for the time being, does
remain hot. There's lots of opportunities. People that
are being let go during this time are able to
find new roles very quickly. Andrew is the same
true for those in the technology space, losing their
jobs. For instance, at twitter, 3700 people
expected to lose their job today under new leadership of
Elon musk. And we've seen other companies announce hiring
freezes or layoffs in the tech space as well.
Yeah. Over the last month, tech was the
area where we've seen the most job cuts announced.
It's one of those areas of the economy that's first
to slow down. When we see the overall economy
slowed down. They tend to hire out into the
future when things start to cool, they have to
make cuts more quickly than other parts of the economy
. For those workers at some of these or organizations
and tech, their skills are in high demand across
lots of different sectors. They're still really rare and
valuable workers. So I would imagine their job searches
will be relatively quick, but we are seeing not
just a number of cuts from technology industries, but
also organizations like Apple and Amazon announcing they're gonna cool
hiring. We've come off of a really strong,
higher hiring period and it looks like that may be
slowing or coming to an end. So Andrew.
I'd be curious to get your, take the Fed
president making it clear obviously the Fed chair that the
labor market may cool ahead as interest rates continue to
rise. What's your outlook for the labor market the
next 3 to 6 months? Do you expect that
the labor market can continue at its current robust pace
? I don't think it can continue at this pace
. We've been moving the labor market's been moving at
a breakneck pace for a year and a half.
It's been running so hot that the Fed is actually
trying to cool it down and while we haven't seen
it cool down too much yet, almost inevitably in
the next 3 to 6 months and into the next
year, we'll continue to see it cool down even
if they have a perfect soft landing, it's still
going, I mean, rising layoffs and lower opportunities
. If the Fed over correct, we could see
much further cuts and layoffs in the future. So
how should americans prepare for these next 3 to 6
months even into next year? Andrew? Because we
keep hearing about the R. Word recession, that
the recession is on the horizon might not have a
major dramatic effect on the labor market, but for
people trying to plan ahead, what would you advise
them? Yeah, I mean, we're still seeing
americans quit at a really high record high rate.
Uh but I would say to people that are thinking
about switching jobs, it might be worthwhile considering that
when a recession comes, a lot of companies policy
is last in first out, when they look at
layoffs, so your tenure at an organization, if
we do go into a recession is something valuable and
worth thinking about, even though there are clearly still
opportunities available to increase your current wages and negotiate because
the labor market is remains hot and there are opportunities
out there. Uh, opportunities, do we know
which sectors are seeing the most hiring Andrew that you
expect will persist and what does that mean for wages
? Yeah. Well, the wages are still growing
eventually. They'll start to cool off from the pace
that we've seen them growing at over the last year
. Right now, we saw the highest number of
new jobs added in the healthcare sector will continue to
see that as we see this long term trend of
baby boomers retiring starting to age and need more health
care. Uh, that's an area that we expect
to see grow over the long term. I would
stay away from sector like automotive and construction and new
home sales. Those are areas of the economy that
tend to be most acutely affected by rising interest rates
. Has the labor market fundamentally changed? Andrew in
the wake of Covid? Because it is still wild
that there are millions of job openings and the overall
jobs picture has held up despite some of the other
challenging factors out there. Yeah, it's a good
question. We don't know whether or not americans are
ever going to come back into the workforce at the
same level that we saw prior to Covid. We're
still down about a full percentage point. When we
look at the employment to population ratio, it's about
3 to 4 million fewer americans than we would expect
to be working if we stayed on trend where we
were prior to the pandemic. Although we've been in
a very long term downward trend and participation in the
economy, so it might have just been a slight
step forward in that progression. Hopefully we do start
to see americans come back in greater numbers to the
workforce to fill some of these holes that have caused
this, increased quits, rate, high opportunities and
, you know, this low period of this real
labor shortage that we've been in for now a year
and a half. Alright. Andrew, Challenger,
senior vice president and outplacement firm Challenger Gray and christmas
Andrew, thanks so much for taking the time,
especially on a friday.