What’s Actually Happening in the U.S. Jobs Market?

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0:34Hey, Y &B listeners, this is Anthony Bansy for The Wall Street Journal.

0:42Yes, yes, we're still in a break, and we are still cooking up a personal finance podcast just for you. But until then, we are sharing a special episode of What's New Sunday. It's our weekly show where we tackle the big questions behind the headlines. And this week, the show tackled a topic that hits close to home for all of us. The job market. They answered listeners' biggest questions about layoffs, AI, and the future of work. And if you like it, check out What's News wherever you're listening to us. One hundred and thirty thousand. That's the number of jobs the U.S. added in January, more than doubling analyst expectations, with gains in health care and social assistance roles helping to outnumber declines in government, warehousing, information, and financial services.

1:30But if that data point still leaves a lot unsaid about the complex state of the jobs market, especially with new revisions to the data showing that fewer jobs were created over the last two years than previously thought, well, worry not, because we've been tracking down answers to your questions about the job market from a pair of excellent reporters. Justin Layhart covers economics for us out of New York and from Washington, D.C. We're joined by workplace and careers reporter Lindsay Ellis. Justin, one thing I keep seeing readers asking about in the comments of our jobs report stories is can we even trust the numbers, implying there may be some real jobs numbers out there we're not seeing?

2:10What should we make of that sort of insinuation? Yeah, the Bureau of Labor Statistics has not been as well funded as a lot of people would like. And it's just getting more and more complex. So, you know, we can have these situations where we have very large revisions. I mean, we've also had coming out of the pandemic, you know, lots of weird distortions that are hard to keep track of. Businesses don't respond to surveys like they used to. People don't respond to surveys like they used to. So, you know, we are sort of more prone to measurement error, you know, that will eventually get fixed. But it can, you know, really throw you for a loop.

2:47Yeah. And beyond the official statistics, there are unofficial measures out there that are flashing warning signs as well, contributing to this disconnect we see between the positive economic assessments coming from the White House and then on the other hand, how it feels to be in the labor market. Lindsay, you speak to people in all different walks of life for your reporting. I'm curious where you're hearing that tension come up. Many people who I interview who are looking for jobs say that there is this massive disconnect between what they see publicly and their own day to day experience. and many of the people who I've been talking to who feel totally stuck in their careers and in their job searches are looking for, you know, corporate jobs.

3:27You know, the growth that we're seeing is in healthcare and social services, as we just discussed. And so if you're looking for a job in finance or in tech, a desk job in professional services, those sectors aren't seeing that kind of growth. And so in that respect, you know, the numbers are very much reflecting the experiences of workers and job seekers who are just like, where do I go from here? A good reminder that not every job is created equal. White collar workers in particular might be not so satisfied with what's available out there, even if they technically represent a job opening. I want to drill into one particular cohort, older Americans.

4:06This is something that was brought to our attention by a listener, Bailey Doloff in Saratoga Springs, New York. He called in to Describe something that he and his wife have been seeing. We often notice a lot more older people working in service positions like Dunkin' Donuts and CVS and our local supermarket. The last two office assistants we've had have been retirement age, with the last one having to come back from retirement because they couldn't afford their bills. We are young and we are afraid that when we get older, the world isn't going to change and it's still going to be in a position where we can't retire.

4:44It's a really interesting observation. I recently did some reporting on how job seekers in their 60s broke through in this market. and many of them said that when they applied for jobs squarely in line with the experience that they had, they felt that they were perceived as overqualified or that hiring managers think that they might not take a job, and so they felt squeezed out. A few of the people who we talked to wound up in positions that they maybe wouldn't have otherwise considered, a front desk manager or driving for Uber, just like the listener suggests. But one area that I did find really interesting in doing that reporting is that, you know, the older workers who said that they had success, one thing that they did to distinguish themselves was to really lean in on their connections, sometimes over decades in the workplace.

5:42You know, that's not something that a 25-year-old or a 30-year-old would have, you know, long-time relationships in which you've shown your reliability and the like and have really gained a specialized set of knowledge. And so we talked to a few individuals who were really hitting that message hard, really leaning into their established networks to kind of break through in this space. Yeah, those networking connections, really vital. You know, speaking of the difficulty, maybe younger workers are experiencing looking for jobs. We heard from listener Alex Kittredge in Brooklyn, who described, honestly, what sounds like a pretty demoralizing job search.

6:21Let's hear what he had to say. I've gone on about 150 interviews in the last 12 months. And, you know, it really has shown me how tight the labor market is. No matter what I do, you know, I always get to the final round, but it's between me and, you know, three other candidates in the final round. And, you know, it just shows how highly qualified and highly competitive market is these days. I should throw into the mix that we also did hear from a listener who runs a digital marketing agency in Connecticut. He said he's seen a massive surge in applications, though actually this is a problem in and of itself, too, because he said he's got so many of them coming in.

6:56He now has to pay a company to screen all of these candidates. He suspects maybe AI is responsible for this deluge. But putting that aside, Lindsay, it just doesn't sound like we are dealing with a business as usual job hunt anymore from all sorts of different angles. Oh, gosh, so much to follow up. Applicants and hiring managers, for what it's worth, describe the job market right now as just robot versus robot. Job seekers are basically pushing out AI applications and companies are using AI tools to screen them. And it's just like, when can I actually talk to a human? I've been seeing in some recent research that young professionals might not be impacted as frequently by layoffs, but when it comes from transitioning from school to the workforce, that is a harder transition to make.

7:45When I talk to companies about that, especially smaller businesses, they describe a sense of hesitancy of, do we really need this role? We don't know what policy is going to bring. We don't know what AI is going to be able to do six months from now. Maybe let's hold off on hiring someone to do this entry-level work. And certainly that aspect of this is anecdotal, but I do think the caution is reflective of an environment that might make it more difficult for young people to break into. Okay, a robot versus robot job hunt. We're going to just put a pin in that and come back after a very short break to dive more into the effect that AI is having on the labor market now and maybe in the future.

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9:08Justin, just before the break there, Lindsay was hinting at some of the uncertainties that exist around how AI is going to transform the labor market. This is a theme that we heard a lot about from listeners. Before we hear from them, though, I just was hoping you could put some numbers to this. Do we have evidence of how AI is affecting the labor market writ large? There is some evidence that AI is really hurting some jobs. It's not something that's going to show up in the aggregate numbers. So there's some research out of Stanford using really granular data from the payroll services company ADP.

9:43They said, yeah, for sure. We're seeing this effect. It is affecting some occupations. It is particularly affecting young people. It's really, really slight, though. But I do think something that Lindsay pointed to, there's another way that AI can be affecting the job market. And that's that businesses don't know what its capabilities are going to be. And that might be feeding more into this very low hire environment that we've been having. Okay, so to see what you can squeeze out of your current workforce. Lindsay, I'm just staying on AI for a moment. I want to get you to respond to a pair of comments from listeners.

10:20The first coming actually from Silicon Valley from sales engineer Rachel Badore. Recently, my boss asked me to code an AI agent to replace a big chunk of my job. So I have been happily doing that because he asked for it. but it does make me nervous. So I have been looking at different ways to upskill and thinking about switching to a more strategic role and leaving the technical stuff behind. One response to a rapidly changing technological landscape, but though not all the AI talk is doom and gloom, because we also heard from New York listener Miles Hilliard, who's the co-founder of a commercial insurance agency.

10:57He told us he's hiring now and that AI is actually helping his business to get a leg up, describing his competitors who maybe weren't using it as antiquated. It actually allows younger folks in the workforce that may have less experience be able to work at a higher clip because they're supported by a more robust data infrastructure that allows them to be more educated and thoughtful about the work that they're doing. It also allows people that don't have as high of a salary to be able to work at a higher clip or manage more revenue or more responsibility. Lindsay, it sounds like management and workers are not singing off the same score sheet here about AI.

11:38Yeah, that is a really interesting dynamic that's playing out in a lot of different workplaces because executives can talk about the benefits of this technology in press releases or earnings calls or doing a podcast. But, you know, when the rubber meets the road, they need to get the rank and file on board. And a survey of about 5 ,000 white-collar workers from the AI consulting firm section, we reported on this recently, you know, showed a really interesting divide in that, you know, employees were saying AI wasn't saving them much time at all in their daily work. And many of them just reported feeling super overwhelmed by, the ask to start incorporating it into their jobs.

12:23Meanwhile, executives were saying the technology was saving them significant time day to day, week to week. I've seen some other research that has found that a significant chunk of time savings from AI is sort of reinvested in correcting errors or poor output from the technology. And one might think that it is the lower level employees who might be absorbing that kind of work. I am sort of all ears for practical, real-life examples of how this is playing out in the workforce. We've been covering a few. So, you know, I have my eye out on how this is going to unfold in all kinds of different industries.

13:03Okay, so listeners, get in touch with Lindsay. We're going to blow up your inbox. Justin, just trying to bring this all together, where does this leave the labor market overall? I was reading one of your recent pieces. The term deep freeze came up. This was the assessment of the market by EY's chief economist. I mean, unpack that. And as a parting thought, I'm curious what you'll be watching for in the months to come. Yeah, so there are a bunch of things going on with this deep freeze, which is really this low-hire, low-fire environment that we're in. You know, I think a big one that, you know, maybe doesn't get sort of discussed that much is people are really, really worried about the labor market.

13:40They're a lot more worried about the labor market than you would expect from, you know, where the unemployment rate is. 4.3 percent. Tons of people, at least according to the official data, are not out of work right now. Yeah, but they're worried about it. So you just don't have people leaving their jobs. They're not quitting their jobs. You're not having that sort of churn in the labor market, right? And a lot of hiring every month is just replacing people who have left. So if nobody's leaving, you get this sort of stasis. And it's really, really tough. You know, especially for young workers, for workers who are, you know, just graduated from high school or just graduated from college.

14:17And those are the folks have been really struggling the most to find jobs and to find good jobs to start their careers with. Lindsay, what are you watching in the weeks, months to come as we suss out what's going on in the jobs market? The key thing that I have my eye on is what are the ramifications of this freeze, as you and Justin described so well, on how people are weighing their next career steps? How do they see the potential for advancement, for change, for pivoting? How do you even break in in this environment, both from a practical tips perspective and also just how does one think about the arc of their career when there is this moment of such a disconnect between the unemployment rate and the stagnancy that many are experiencing?

15:02Lots to keep an eye on. I've been speaking to Wall Street Journal workplace and careers reporter Lindsay Ellis. Lindsay, thank you so much for stopping by. Thanks for having me. And also with us today, Justin Layhart, journal economics reporter in New York. Justin, thank you so much. Thank you. And that's it for What's New Sunday for February 15th. Today's show was produced by Daniel Bach with supervising producers Sandra Killhoff and Melanie Roy and deputy editor Chris Sinsley. I'm Luke Vargas, and we'll be back after the holiday with a brand new show on Tuesday morning. Until then, thanks for listening.

16:03Thank you. testen