Author: Andrew Berger-Gross
Welcome to the July 2024 edition of NC Economy Watch: an update on what’s happening in the North Carolina economy and what it means for you, brought to you by the Labor & Economic Analysis Division (LEAD) of the NC Department of Commerce.
In this edition of NC Economy Watch, we dig into some fresh economic data releases to highlight three labor market trends: a declining rate of labor turnover; an elevated high rate of working from home; and a record-high rate of job satisfaction (although with signs of trouble emerging).
Three Things You Should Know About Today’s Labor Market
Labor market information is our bread-and-butter here at the Labor & Economic Analysis Division of the NC Department of Commerce (“LEAD”). We’re always keeping an eye out for the latest data releases to help us better understand what’s happening in the economy and what it all means for the people of North Carolina. Here are a few trends we’re watching right now:
The Labor Market Is Stuck in Neutral
Earlier this month, we received the latest numbers from the US Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS). While JOLTS is primarily known for its data on job openings, it also provides timely information on hiring and separations, including how many jobs are being created by employers and how many jobs are being eliminated through layoffs or discharges.
Data from JOLTS depict a labor market that has been stuck in neutral for the past year, with relatively few layoffs but also relatively few hires [Figure 1]. Hiring and layoff activity usually move in opposite directions; for instance, hiring fell and layoffs spiked during the COVID-19 recession in 2020, while the subsequent recovery saw a high rate of hiring and very few layoffs. More recently, the hires rate has declined, but there’s been relatively little increase in layoff activity. Both the hires rate and the layoff rate are currently below their 2019 (pre-COVID) average, with hiring activity hovering around rates seen all the way back in 2014-2016.
Figure 1
A lower rate of hiring, along with a declining number of job openings, means that jobseekers are having a harder time accessing new employment opportunities. At the same time, a low rate of layoffs means that workers who are employed are unlikely to lose their jobs. This is a far cry from the worst-case scenario of a recession; for now, businesses are still holding onto workers, and they’re still adding more jobs than they’re eliminating. But even though reduced rates of labor turnover aren’t as harmful as recessions, they aren’t harmless either: low turnover rates can hinder career progression and trap workers in jobs that are a poor fit for them, resulting in lower productivity and slower economic growth.
For Many Workers, Higher Rates of Remote Work Are Here to Stay
For now, we can’t say for sure whether the recent decline in hires and layoffs is unique to today’s labor market or merely a continuation of long-running trends that preceded the COVID-19 pandemic. One thing that’s undeniable, however, is that the pandemic led to lasting changes in how many Americans commute to work.
The US Bureau of Labor Statistics’ American Time Use Survey (ATUS) is one of the best tools we have for tracking changes over time in the nationwide prevalence of remote work. Data from ATUS show that rates of working from home skyrocketed in 2020 as many employers adopted remote work technologies to help slow the spread of COVID-19 [Figure 2]. This “new normal” appears to have outlasted the worst of the COVID-19 pandemic: high rates of working from home persisted through 2023, two years after most states dropped their social distancing mandates, with 35% of workers doing at least some work from home and 23% of all working hours being performed at home. It’s important not to overstate the significance of this trend; work-from-home rates have decreased somewhat from their pandemic-era highs, and the vast majority of workers in the vast majority of jobs are unable to work from home. At the same time, for those workers who can work from home, this trend has been nothing short of transformational: the share of working hours performed at home in 2023 was more than double the amount in 2019, prior to the COVID-19 pandemic.
Figure 2
Job Satisfaction Is at a Record High, but Signs of Trouble Are Emerging
All this helps set the stage for recent numbers on job satisfaction from the Conference Board. Sixty-three percent of workers nationwide reported they were satisfied with their job in 2023, higher than at any point in the survey’s history going back to 1987. This comes on the heels of a decade of tightening labor markets that put workers in the driver’s seat, leading to rising compensation and improved working conditions. However, when asked for more detailed information, survey respondents said they’d recently started to grow less satisfied with specific aspects of their job. While the share of workers satisfied with their commute remained elevated at 68%, reflecting the persistence of remote work, the share reporting satisfaction with their wages declined from 58% in 2022 to 53% in 2023 amid slowing wage gains and a cooling labor market.
Figure 3
This article has focused on emerging labor market trends at the national level, but we have every reason to believe similar trends are affecting the labor market here in North Carolina:
- JOLTS also publishes data on hires and layoffs at the state level, and while these data are highly variable and difficult to interpret due to the survey’s small sample size, they show that labor market conditions in North Carolina are broadly similar to what we’re seeing nationwide.
- ATUS doesn’t publish data below the national level, but another data source, the US Census Bureau’s American Community Survey (ACS), has numbers on remote work at the state and local level, and these data show a rise in remote work in North Carolina persisting through at least 2022. (ACS data for 2023 will be released later this year.)
- While we don’t have data on job satisfaction in North Carolina, we do know that our state has seen a declining number of job openings and slow wage growth the past couple of years, demonstrating a slackening in the labor market and suggesting that conditions may have become more challenging for North Carolina workers.
For inquiries and requests, please contact:
Meihui Bodane, Assistant Secretary for Policy, Research and Strategy
NC Department of Commerce, Labor & Economic Analysis Division (LEAD)