Why Finding a Job in America Is Still So Difficult

The U.S. job market is showing signs of life after months of slow hiring, but with Americans still worried about paychecks, job security, and the cost of living. Is the labor market really as strong as the numbers suggest? Here to break it all down for us is Corey Cantaga, head of economics for the Americas at LinkedIn. Thank you so much for being here, Corey. Thanks for having me, Justine. Yeah, of course. I mean, thinking about what we're learning now in the latest jobs report, 165,000 jobs added in October, well above expectations. How big of a win is this for the economy in real terms? The labor market has been slowing down now for about three and a half years. And this is really the first batch of consistent reports we've seen this year that suggests that things are leveling out, stabilizing. And we see that also in our data on LinkedIn, hiring is up year over year for the first time since July 2022. So it does seem like the labor market has found its footing, that hiring slowdown that we've been experiencing the last three and a half years, at least for now, seems like it's settled. Yeah, it's nice to have some positive news and something at least settling and not getting worse. Looking at unemployment dipped to 4.1%. So does this signal a real turnaround in the job market when you look at all of these kind of factors together? Not yet. We do see that there is some momentum in the job market. We've seen hiring level out. We are starting to actually see the number of jobs available per applicant increase. So there's more job availability. That competition between workers is less severe. But hiring is still down 20% compared to what we saw prior to the pandemic. It's still a slow labor market. When we ask our members how they feel about their ability to get and maintain a job, increase their finances, advance in their careers, they still feel terrible. So the labor market has steadied out, but it hasn't given enough momentum to make the labor market better for job seekers, to provide more opportunities. We don't see significant wage gains. Workers aren't able to make a lot of gains when they switch like they have in the last few years. So this settling out, this leveling out is not the same thing as momentum in the labor market. Yeah, it seems like we're seeing some of those numbers get better, but the actual feeling that people have who are looking for jobs is still what it's been for a while now. I mean, LinkedIn really has this kind of front row seat to hiring trends. Tell us a little bit more about what you're seeing that maybe some of the government numbers might really not be telling us at this point. We're seeing signs of life, particularly in these cyclical industries. We've seen hiring up in construction, manufacturing, transportation, and warehousing. That's really a sign that things are steady and they're leveling out. When we don't see those industries doing particularly well, they sometimes can be forward-looking as signs that things are just going to continue to slow. And manufacturing is one of those industries that got hit by several big shocks, the interest rate shock. There was several shocks with geopolitical conflict. There was a shock with trade policy. And since we're starting to actually see manufacturing level out, that's probably a good sign that there's not really a lot of room for things to get worse. The question is, how much can they get better and how fast? Yeah, that's always the question. And again, as you're saying, we're seeing those things level out. But then where are we going to actually have for job seekers that moment where they say, okay, things are actually getting better for me. So tell us a little bit more about what job seekers are still struggling with. I mean, we're hearing that people are applying to hundreds of jobs without getting interviews even. So why is it still so difficult for people looking for a job right now? There's just less availability and a lot more applicants. That's really the dynamic that job seekers are facing. We've seen that they've had to apply a lot more, a lot more applications per applicant. That's come down so far this year, but it's still elevated compared to what we saw in, say, 2019 and 2020. So job seekers are having to work very hard to find a role. If you lose your job and you find yourself unemployed, that is a tough spot to be in. We see a lot more people staying put. And so you don't have as many of those backfill opportunities opening up either. Prior to the pandemic, it was about 60% of companies who had a person going in and out the door every month. And we don't see that as much. It's only about half of companies now that have that regular churn that creates new opportunities for people to take on. So there just aren't as many opportunities and it's just much more competitive. Yeah, it really seems like there's just so much less of that movement. It's just much more stagnant when it comes to people leaving a job or then harder time finding a new one. Wages are also rising, but then the cost of living is as well. So do you think that workers are actually getting ahead financially or because the cost of living is going up so much and we have other economic factors at play here that it's really not helping people that some wages are higher? If you own stock, which is not the case for many of us, then yes, you probably are doing a bit better financially. The markets have rallied. They're doing quite well to close out the year so far. But for the rest of us, we have to land our income and our pay. And that is not keeping up with inflation today. Even if you're switching jobs, that job switching premium is barely keeping up with inflation by some measures. And so we just don't see a lot of momentum on the pay side. Workers don't have the leverage to negotiate higher wages today, given that there's a lot more applicants on the market relative to the number of jobs. Yeah. And thinking about some of those fears that people have that, okay, my wages are not going to keep up with inflation. And also I can't leave my job because it's harder to even get a new job. There's another fear out there that people keep talking about artificial intelligence already changing hiring. Talk to us a little bit about how that's changing, especially for entry-level workers already. We actually see entry-level workers performing on par with the overall market. It's just more challenging for them because if you don't have a job to stay put at, then you really do have to rely on hiring. So a slow hiring rate will disproportionately affect young workers. We don't see any broad evidence of displacement coming from AI, but there are certainly some areas where there's outsized weakness that is probably very much due to AI, technical writers, copywriters. Hiring on LinkedIn there is way down compared to what we saw prior to the pandemic. But for most roles. We don't really see the case. It's not really the case right now that AI is really having an effect. There may be an effect coming from anticipation of AI, not AI itself. It hasn't really been adopted among all work, among all companies and companies are still trying to figure out how to even integrate it effectively. But there's that anticipation that we may see productivity gains. We may see major benefits from AI and that can hold employers back from hiring because they say, well, I don't actually I have slower demand right now. Maybe I don't need to hire as many workers today. And then you know what? Maybe next year I won't need to if I've adopted this technology and I'm more productive. Yeah, that anticipation is such an important factor to keep our eye on there as we move forward. Looking now at what we just had here, the Democrats making major gains in the midterms with affordability being a top issue across the board. What does that really tell us about how Americans feel about the economy? We know they don't feel great. When we look at how their outlook varies from both employers to workers, we know that only about two in five executives expect the economy to improve over the next year. And that drops to one in five when we look at workers or employees. So Americans don't feel great about their prospects over the next year, even though growth actually looks relatively good. So there's this big disconnect between growth. And part of that is where the growth is happening and who's benefiting from it. And how people are actually feeling and what their on-the-ground experience is. So the outlook isn't particularly positive for most folks. They're expecting things to either stay the same or potentially get a little worse. In thinking more about this kind of shift in power in Washington, how do you think that might change how businesses then approach hiring and investment for the next year ahead? It only matters to the extent that we're going to see a change in fiscal policy. Given that there's a different party in charge of Congress versus the executive branch, it's hard to imagine that we're going to see major shifts in fiscal policy. And if we don't see a big injection of cash in the economy, for example, or spending cuts in particular areas and support in other areas, it's hard to imagine that dynamic actually changing. And a lot of what we're going to see at the start of the year is already baked in from what we've seen. Congress already passed in the last year or two. So I don't expect that we're going to see major changes coming in the next six months about how the economy is faring, because we're probably not going to see any major shifts in fiscal policy. Right. It probably will take a little bit of time for any of those changes to actually take effect and be something that we would actually notice. When you do look ahead to next year, do you think that Americans can expect more job opportunities or do you think that it'll remain kind of how it is now already? As long as the economy continues to grow, which is what we expect, we're still going to be in our 2% to 3% sweet spot. That should be enough to keep unemployment low. The question is, are these jobs going to be broadly distributed, or are they going to be concentrated among a particular set of workers? For example, we see AI is probably adding more jobs than it's subtracting today, but those gains are disproportionately going to people who have degrees. They're disproportionately going to men. Particularly among those higher wage occupations like AI engineers, machine learning engineers. But there are gains to be had. Just the question is, how are these gains going to be distributed throughout the economy? Well, we have a lot to keep our eye on here as we move forward. But we appreciate you being here to break it down for us today. Corey Cantonga, Head of Economics for the Americas at LinkedIn. Thank you so much. Thank you.