New signs of a cooling labor market

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A survey of U.S. companies showed that hiring was flat in the fourth quarter, the first unchanged reading in a decade and the latest signal that the labor market is cooling off.

Eighteen percent of 95 firms reported that employment had risen over the past three months, while an equal share said it had fallen, according to a National Association for Business Economics survey of member firms released Monday.

That net reading of zero was the first since the fourth quarter of 2009 and it followed declines in the past two periods, from 24 in the second quarter of 2019 and eight in the third quarter.

Such a drop “is somewhat surprising given that payroll employment growth — as reported by the Bureau of Labor Statistics — remains strong,” the organization said in its latest Business Conditions Survey. “This result may indicate that respondents’ firms participating in NABE’s survey are having difficulty finding qualified workers.”

Other indicators have shown signs of cooling in the labor market, including December’s jobs report from the Labor Department’s BLS, which showed payroll gains decelerated to 145,000 from 256,000 the prior month. Separately, the Federal Reserve Bank of Kansas City said Thursday that fewer manufacturers in America’s heartland are giving above-normal raises and reporting difficulties finding workers.

NABE said its survey showed high-skill positions remain hardest to staff, though the share of firms reporting such difficulty has declined.

Bloomberg News
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