The July jobs report showed the U.S. economy regained all jobs lost during the pandemic. The gain of 528,000 jobs is almost double the expectation analytics were expecting. 
in addition Wage growth also rose, as average hourly earnings jumped 5.2% from the same time a year ago. All while, unemployment is ticking slightly lower, now sitting at 3.5%. The data shows that the labor market remains strong despite other signs of economic weakness. Kathryn Minshew, CEO of the Muse, discusses the disconnect between labor and the economy. Kathryn also highlights what this report means for people looking for work.


Opening Bell

Good News From the July Jobs Report May Mean Bad News Later 

here to discuss as Kathryn Minshew Ceo of the muse, Katherine. What do you make of july's jobs report. And I guess specifically why do you think we are seeing the jobs market be so resilient right now, despite a lot of negative narratives that are out there and those signs of the economy kind of weakening. Yeah, it is a very interesting time because, as you said, it's incredibly unusual for us to see so many indicators of economic health moving in different directions. One of the things we're seeing in the labor markets right now is that so many businesses have been struggling to hire for the last several months really, since the kind of rebound post the initial onset of the covid pandemic. You have a just very, very fierce warfare. You have many people trying to staff up their businesses and in a lot of cases being unable to do so. And so now, even though we do see some signs of softness elsewhere in the economy, the payroll data is still incredibly strong. Um and there are a lot of businesses out there still hiring, still adding jobs. What about labor force participation? Let's talk about that. And do you think it can remain at these levels currently, You know, I think that there's a lot of factors that are going to affect labor force participation. We're certainly not seeing a huge increase in the number of people who are coming off the sidelines? Re entering the labor force, people who may have taken a step back during Covid or before. But we are continuing to see a lot of movement for individuals who are in the labor force. We're seeing unemployment at record lows. So I think that we're still seeing a very very tight market for hiring for labor, particularly in certain industries. This is obviously not not evenly felt across all sectors, looking a little bit ahead and in context or to give more context, the jobs report C. P. I. That data is going to come out on Wednesday. The hope is that we see a peak but the reality is we haven't seen that peak yet. So we could blow past that just like we have for the last couple of months when we wanted is he a peak? How do you think higher inflation can impact the job search as it relates to wages because we have seen wage increases and wage inflation still be a very real thing, although not completely in line with with ordinary inflation that we're seeing. Mhm. Yes, exactly. As you said, wages do continue to rise but they're not rising as fast as some of the other indicators of inflation. I think that we should expect to see pressure on wages continue to increase while there is so much hiring, so much demand. Um And this is one of the things I think that the Fed is going to be seeking to to effect as they look at how we you know how we kind of exert a little control, we have to um to affect the overall economy that being said. And while we got a headline number, that it was almost double what the expectation was certainly way stronger than a lot of economists had predicted. The reality is we've seen the headlines over the last couple of weeks. Last week, for example, walmart oracle Robin Hood all announced they're cutting their workforce and some of them pretty significantly. What do you make of this latest string of layoffs that that we're hearing about? Especially as we go forward and see other industries remain under pressure. Also, these industries feeling that inflationary pressure and then having to respond accordingly, especially as the market's kind of have been pulling back. Yeah. As you said, it's fascinating looking at the data across different sectors because you have businesses and sectors that are adding jobs, others that are shedding. We continue to see large firms, as you said, report layoffs and some of this is that many companies staffed up very aggressively sort of post that initial pandemic cut. They were looking to regain market share. They were investing in expansion. Now that the economy is cooling and there are signs of perhaps some choppier waters ahead. You see some of those companies pulling back and either cutting heads freezing hiring. But again, a lot of the companies that we work with on the muse, they are actually looking across their different functions and teams and they may be still hiring in certain areas such as engineering or data science, where talent continues to be incredibly scarce. And then there are other sectors where they're pulling back their pausing hiring or as you said, we've seen an increasing number of companies start to look to layoffs to kind of cut their own costs and prepare for the environment that we may be heading into. You look at the july jobs report and it's clear if you have any questions, the labor market is still relatively healthy. It is still a hot labor market to your point a moment ago. Um, it's still tight with that in context. Should people then be concerned, you know, about a recession or something like stagflation this year, given that that pillar makes those scenarios so different than historically in the past. Yes, it is a little hard for anyone to predict with certainty because there are so many factors at play here. I do think that the strong labor market continues to indicate that, you know, we are not in kind of a classic recessionary scenario yet, but that doesn't mean that we're not heading towards one. And so, you know, we're seeing businesses respond in very different ways based on the kind of unique pressures that their own, um, you know, their own businesses feeling based on this x Economic environment, a lot of them are still hiring, there's still a lot of work available for individuals looking for a new job. But as you said, I think many businesses are starting to be more cautious and so you have, you know, these these different pressures being exerted on the economy that that I think we're all in some ways waiting to see, you know, how does this play out and and which forces ultimately become stronger in terms of what happens over the next 6 to 12 months? Yeah, that's a little bit. We try to figure out every day here and try to get a gauge of where we're heading um in totality, then if you're someone out there looking for work right now and you kind of get an understanding of what july's picture showed for labor market, what does this mean for you? Do you still have um, you know, as much leverage as employees have enjoyed for the better part of the last year and a half, I think that you have some leverage, but not quite as much as at the peak earlier this year, when we saw many businesses just being willing to, you know, pull out all the stops, offer all of the benefits to attract workers. You still do have a lot of leverage if you're a job seeker in today's environment, but it has cooled a bit. I would encourage any individual who are out there thinking about changing jobs or looking for work to understand some of the particulars around their function and their industry. Again, there are certain sectors where workers still have tremendous leverage hospitality. Um travel and leisure added tremendous numbers of jobs. We're seeing a lot of competition for talent. Obviously, business and professional services, particularly around technical and data driven roles continue to be markets where workers have the upper hand. Many of these conversations, other sectors are starting to cool and so I would just encourage job seekers to do the research, understand and know your worth and don't be shy about going out there and looking for a job because there's still a lot of businesses that are looking to hire you. You just might have to put a little bit more time and effort into the search than a couple months ago when the market was even more white hot and as you mentioned a moment ago, there are sectors out there that are starting to cool down also in light of kind of what economists had had certainly forecasted for the july's report, there was a sense that we should be starting to see a cool down. What's your outlook for the rest of the year? Is that cool down just a little bit delayed in terms of, you know, headline number here. Do we get that later on in the year? So, you know, it's funny, I think that we're seeing um you know, that that we should expect to see continued pressure on the broader economy with the Fed hiking rates with some of the supply chain issues at the same time, I think the labor markets are undergoing a couple of more fundamental changes that are going to kind of continue this pressure on workers leaving. For example, we saw a lot of people during the great resignation that we're willing to quit jobs that didn't fit their core needs or values or priorities. So we're seeing much more pressure on employers to um to offer certain benefits, certain employee experiences to essentially put the work into keeping their workers. And a lot of employees are really showing they'll vote with their feet and they'll leave and go get a new job if they don't feel satisfied in their current position. So, you know, we've seen a lot of really interesting trends on them. Use 80% of people um, in the gen z and millennial demos said that they would leave a job or they, it was acceptable to leave a job in under six, six months if it wasn't as advertised. So I do think we can expect to see a lot more volatility and companies adding jobs to continue to try and, you know, to meet the demand that we're seeing from consumers in certain sectors of the great resignation still alive and well. And while the labor market not as hot, hot as it once was, still july, clearly showing that labor report that it is still hot labor market out there, Catherine really appreciate your time and your insight, Kathryn Minshew ceo, of the muse