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Let's turn back to the labor market. The government shut down holding the release of the payroll data. Becky Frankewitz of Manpac Group, one of the world's leading staffing companies, writes the following, The official jobs report might be on pause, but the labor market keeps moving and our data shows a market in transition. Becky joins us now for more. Becky, welcome to the show. It's been too long. What are we transitioning from and to what?
Yeah?
So, first, it's a strange no jobs report jobs Friday. So usually we say happy jobs Friday, and it is still a happy jobs Friday.
Because we see.
Real time, real world data and John, we're watching three trends. First, job hugging is the new job switching, so we're not seeing workers switch jobs anymore. We're seeing them hold onto their jobs. In fact, switching us down fifty percent in the last two years, so workers are staying put. The second big trend that we're seeing is lateral is a new vertical. Employers are holding on to their talent and so there's this change called micro mobility where we're seeing
people change titles but not change companies. And the final piece I'd say is growth isn't gone, it's just moved. So we're seeing growth in immediate benefit roles, a lot of growth in the data scientists, databased architects, things that are tech forward, and we're seeing some shifts in and even manufacturing where we're seeing blue collar workers like engineers, people who are on the front line in terms of manufacturing starting to grow.
Logistics is a little bit soft.
Of course, education, retail is showing some strength, but there is still growth.
You just have to look harder to find it.
Bekay, is there growth in entry level jobs?
And Marie, it's one of the top things we're watching. So if you said what are you watching closely, I would tell you impact of AI and entry level jobs. We are seeing reduced demand for the educated yet inexperienced, and that is people coming out of college. So employers are prioritizing people who have actual experience because again they
want immediate impact. Employers aren't hiring to develop people, They're hiring to actually get benefit from their hires today, and that is impacting our entry level professionals.
Historically, what kind of time can you reckon this back to when did we see such a weak environment for entry level jobs.
Yeah, it's been a long time memory. We're we're not in the two thousand and eight stage yet, which was a huge crisis. But we are seeing a drop of about six percent in terms of the demand for entry level jobs. And it's coming at the same time the overall job market is continuing to cool.
It's not just cooled, it's continuing to cool.
We see total jobs posted again, I don't need BLS to tell you this. We look every day. Total jobs posted have dropped under seven million. It's always been a seven million mark, under seven million in to the lowest level in four years. And we're seeing this overall slowing in jobs, and we're seeing a change and the kinds of jobs people are hiring entry level And in part it's a bit of weight and see on AI. I heard one of your prior guests talk about that. It's
a bit of weight and see. But it's also a bit of economic uncertainty causing me to prioritize today versus tomorrow.
Becky, can we just pick up on the AI point. Where are you seeing that, how's it showing up and how you do your draw a distinction between what is driven by AI and what's driven by traditional broader economic concerns.
Yeah.
Well, it's hard to break apart, John, if I'm honest, but I'll tell you what the data is showing us, and the data is showing us that.
Tech forward roles are surging again.
Database scientists, data architects, anything on security is surging today. Of course, we've seen some softening and software developers, but guess what, back to entry level roles, it's still one of the top three entry level roles. It's down almost fifty percent year over year, but it's still in volume, one of the top three.
So we're seeing a pretty balanced view on AI right now.
Employers are still telling us that if they're more tech forward as an employer digitizing faster, they're intending to hire more. We're waiting to see that play out, but right now, I would say we're seeing a balanced view on AI. But there is a lot of weight and see on the promise of the impact of what AI can give our economy.
So, Becky, are you seeing any supply side issues, because the big debate on Wall Street is yes, we've seen a step down in payrolls growth, but we've also seen a step down and supply and the economics will come on the program and some of them disagree with each other. Some might say this is bad, we need to respond to it. Others might say, well, this is a supply side story. Yes, you've had a step down in payrolls, but you've not had an increase in labor market slack.
From your standpoint, is there a supply side issue? Do you see that showing up in the business.
Yeah, we're not seeing significant supply side issues, John. What I would say we're seeing is a bit of it. I'm not using it economically, a bit of stagnation in terms of mobility. People are staying put, and when people stay put, it is harder to free up some of the supply to actually generate this transition that normally underpins
our economy. When I tell you that job switching is down fifty percent five zero in the last two years, that is significant and that's not having an impact on overall supply, but it is having an impact on mobility, and mobility generally leads to growth in our economy.
Does this mean workers are not asking for higher wages?
Yeah?
Great, great question, Amory. What we're seeing now again, during the heights of the pandemic, we saw huge bonuses for switching jobs. We're seeing that level has dropped below seven percent. So the premium on switching a job in terms of your pay increase, traditionally runs around seven percent. We've seen that now dropped about six and three quarters. So we're not in sending people to move, and we're seeing an
increase in people who stay put. So I'm telling you this whole idea of job hugging is real from the employee view. And this idea of lateral not vertical, giving titles and a little bit of pay is real from an employee point of view. So they're coming together in a way that people aren't moving.
Workers that are able though, to move structurally higher in an organization because they moved an organization. What sectors is that happening in.
So Amory, we're seeing only two sectors we're seeing this increase in switching, if you will.
That is construction and that is in the financial markets.
And you've seen the headlines on the financial analysts that are switching all over New York City. So those two roles still have quite a bit of agency and we are seeing switching there. But for the others, we're really seeing people stay put.
So, Becky, we've been in this low chain dynamic in the labor market for a while now. Economists have been talking about it on this program. You have too. When things break one way or the other, we're always looking for that early indication. Now, correct me if I'm wrong. I think you used to lead Quaker Foods when you over saw that business. Becky, what kind of behavioral changes were always looking out for for a leaning indicator of which way this economy was about to break?
Yeah, so John, you're taking me in the wayback machine.
Now, we would look at number of items in the basket, and so how many goods are people buying? Trips to store average purchase price that you're actually putting in your basket. And I know now from the jobs market report or what we see in terms of people actually hiring who's hiring today, it is the cost conscious consumer companies that are hiring. Domino's is hiring, Low's is hiring. So we're
not seeing the high end retailers hiring. We're seeing the more accessible retailers hiring, which tells me in terms of early indicator, people are still very cost conscious, uncertain about what's coming, and holding.
Onto their dollars like they're holding onto their jobs.
Becky, this was great. Let's do it again soon. Let's go to see who needs the jobs report when you've got Becky Frankowitz of Manpack Group