Employment slowed down throughout the summer, and there was a drop in hiring trends. Summer economic data has stoked national fears that the United States might be entering a recession. Gross domestic product decreased for two straight quarters. While economists say that conditions in the country don’t meet the formal characteristics of a recession, the risk of one is increasing. Labor trends underscore that risk, as they also slowed in July, encouraging employers to invest in staffing employment liability insurance.
Employment Slowdown: Why and How?
Employment slowed down, and there are reasons for this. Likewise, there are signs about the decline, and where it will go.
Labor Market Indicators
Data from the Conference Board Employment Trends Index showed a drop between June and July from 118.71 to 117.63. It signals slower gains in the job market in upcoming months, which puts the labor market more in line with the slowdown of the economy as a whole. Six of the labor market’s eight indicators drove the summer decline.
- Industrial production (from the Federal Reserve Board)
- Initial unemployment insurance claims (from the U.S. Labor Department)
- Number of individuals claiming jobs are challenging to obtain (from the Consumer Confidence Survey)
- Percentage of involuntary part-time workers (from the Bureau of Labor Statistics)
- Manufacturing and trade sales (from the Bureau of Economic Analysis)
- Unfilled job openings (from the Bureau of Labor Statistics)
Labor Market Outlook
Hiring had slowed from the start of 2022 when employers added approximately 500,000 jobs per month. It is not a surprising slowdown; at this point, the economy has replaced almost all of the lost jobs from the pandemic’s start. The private sector employment rate is higher now than in February 2020. Small businesses, in particular, should consider errors and omissions liability coverage protection in this job market.
Affected Industries
Due to consumer demand for travel and entertainment, the hospitality and leisure industry continues to grow, with 67,000 jobs added in June. The construction industry experienced significant slowing due to the recent sharp rise in mortgage rates. Retail employment is also in danger of dropping as inflation forces citizens to spend more on food than clothing and other merchandise, resulting in retailers holding excess inventory and facing profit losses.
Unemployment Rates
With job openings at the end of June at 10.7 million, there were 1.8 job openings for each reported unemployed person. However, the rising cost of living and trepidation surrounding an upcoming recession are encouraging retirees and others who had vacated the labor force to look for jobs, which has somewhat increased the supply of workers. In June, the household employment survey reported a drop in employment levels by 315,000 jobs, and the registered number of part-time workers is at its lowest since 2001
With the employment index on a downward trend since March 2022, many experts warn of a recession by year-end or the start of 2023. Employers should consider staffing employment liability insurance due to the market’s volatility.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the
optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA
commercial liability partner, we are committed to that partnership and committed to using our
knowledge of the industry to provide staffing firms with the best possible coverage. For more
information about Staffing Professional Liability Insurance or any other coverage, we have
available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of
our representatives.