US firms notice indications of a weakening employment market

People are asking for work at the cardboard box factory owned by Paul Centenary outside of Baltimore since they haven’t seen any for more than a year.

“We didn’t see anything like this a month ago,” said Centenary, chief executive officer of Atlas Container Corp. He said just six months ago Atlas turned to a social service group that puts former convicts into jobs to help them fill positions.

US firms notice indications of a weakening employment market

“Labor is still tight, but it’s loosening up a bit.” They said.

How loose it can be is not entirely obvious. Data from the US Labor Department on Thursday revealed that the unemployment benefit roll out was at its lowest level in decades.

The US labor market appeared to have improved in the first half of this month, as per a study from payroll service provider UKG, despite the Federal Reserve raising interest rates and some economists raising the prospect of a recession.

However, other indicators, such as the disclosure of high-profile layoffs in industries like technology and real estate, indicate a decline.

Tesla (TSLA.O) fired 200 employees last week who were working on the Autopilot driver assistance system. Elon Musk, the company’s CEO, had earlier informed management that a 10% employee reduction was necessary. In its mortgage division, JPMorgan Chase & Company (JPM.N) begins to lay off employees.

For Atlas Container and other US firms, who have managed to fill positions and keep staff over the past couple of years, unwanted job candidates represent a ray of hope.

“We’re always hiring because we’re always losing people,” Centenary said.

“Our place gets hot in the summer,” he said.

Raj Subramaniam, CEO of FedEx Corp (FDX.N), stated last week that he thinks the company’s worst labor issues are already in the past. The international delivery company lost $1.4 billion in its fiscal year that ended on May 31 as a result of wage inflation, employee turnover, and expenses related to thoughtless facility package rearranging.

“Although salaries are higher than last year, they are stabilizing,” Subramaniam said at an earnings conference call with analysts.

According to Subramaniam, the business is now concentrating on utilizing technology to keep employees and manage labor more efficiently.

As a result of the “Great Resignation,” or the mass resignation of workers caused by the COVID-19 pandemic, staff shortages became a defining feature of the US labor market. The US labor market is currently “sort of relentlessly heated,” according to Fed Chairman Jerome Powell, who recently told legislators that there are currently two vacant positions for every unemployed individual.

In the coming days, the job situation is expected to deteriorate, according to Jason Andringa, chief executive of Vermeer Corp., a manufacturer of machinery in Pella, Iowa.