What’s in store for the job market, hiring and quitting in 2023

2022 may have ended in a sea of overwhelmingly negative layoff news, but new data…

2022 may have ended in a sea of overwhelmingly negative layoff news, but new data shows promise that the damage was minimal. It could be a sign the 2023 job market will launch on strong footing, economists say, even with fresh staffing cuts announced this week.

In November, the same month rocked by headline-making staff cuts across Big Tech, the U.S. labor market posted a near-historic low of 1.4 million layoffs, or less than 1% of the workforce, according to the latest Labor Department data.

Meanwhile, there were 10.5 million job openings, or roughly 1.7 vacancies per available worker. Companies were just barely backfilling the share of people leaving, making 6.1 million hires in the face of 5.9 million separations, which includes both voluntary and involuntary terminations.

And all the momentum behind quitting has yet to die down: 4.2 million people called it quits in November, marking the 18th straight month where north of 4 million people voluntarily left their jobs.

Here’s how recent data could spell a pretty good job market in 2023:

Blue-collar workers may have more job security than white-collar roles

As of November, layoffs were way below pre-pandemic norms for workers usually hit by economic turbulence, such as those in accommodation and food, construction and retail, says ZipRecruiter chief economist Julia Pollak.

But terminations have edged higher than pre-pandemic norms in information and finance. The tipping point goes back to July 2022, around the time the Federal Reserve started its aggressive interest rate hike campaign and recession fears really took off.

As a result, sectors sensitive to rising interest rates (like across finance and real estate) and ones hoping to borrow to grow at all costs (like tech) took big hits.

“In aggregate, layoffs are still way lower than pre-pandemic,” Pollak says. The combination of strong consumer demand in the face of high interest rates means “blue-collar workers have much greater job security, which isn’t the case in information and finance where white-collar workers have lower security.”

Job-seekers are ditching innovative (and risky) work to go ‘back to basics’

Recent mass layoffs around tech and finance are a result of companies over-hiring during a pandemic rebound around innovative (read: speculative) initiatives, like crypto and the metaverse.

In response, job-seekers are approaching 2023 by going “back to basics” and betting on jobs with proven security, Pollak says — especially around health care, legacy information technology and other “rock steady jobs where there’s demand today and in the foreseeable future.”

As of November, job openings ticked up for professional and business services, as well as manufacturing, and hiring shot up in health care and social assistance.

High turnover is here to stay, and people are getting jobs without looking

Major corporations are winning the hiring game

How this 26-year-old earns and spends $25,000 a year just outside NYC

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