The U.S. added 528,000 new jobs in July and the pace of employment during the second half of 2022 is expected to remain strong, economists and analysts said.
The job growth in July “far surpassed” the second quarter average of just under 375,000 jobs added month to month, said Joel Berner, a senior economic research analyst at Realtor.com.
“While rampant inflation and relative softness in the stock market over the calendar year have Americans concerned about their spending and savings, the economy continues to exhibit a strong pace of employment activity,” he said.
Strong Job Growth in July
Amid fears of an impending recession, the U.S. hired 158.3 million people, which reaches the level of the pre-pandemic peak from February 2020. The number of job openings remains steady at 11 million in the most recent release of data and the number of unemployed people is around 5.9 million, Berner said.
Job opportunities are “plenty” while the headline unemployment rate fell to 3.5% as the labor force participation rate held steady at 62.1%, which is below the pre-pandemic level of 63.4%, he said.
The average hourly wage rose slightly by $0.15 to $32.27 and the employment market “continues to favor workers who are open to negotiating pay raises or seeking new positions,” Berner added.
The industries that continued to hire in July were in professional and business services, leisure and hospitality, and health care.
Hiring Expected To Be “Strong” in Second Half
The job market is anticipated to remain strong for the second half of 2022, according to research from HR and business consulting firm Robert Half.
The survey indicated that 46% of the 1,500 managers anticipate adding new permanent positions during the second half of the year and another 46% plan to hire for vacated positions and only 8% predict hiring freezes or layoffs.
"Despite talk of an economic slowdown, many companies remain in hiring mode and professionals with in-demand skills continue to have options," said Paul McDonald, a Robert Half senior executive director. "In addition to staffing critical functions, employers are increasingly turning to contract talent to stay nimble."
The survey, conducted June 17 to July 14 with responses from managers at companies with at least 20 employees, showed that 45% of managers plan to hire more contract professionals by the end of 2022, including 60% in technology and 54% in finance and accounting. A large group of employers or 72% anticipate hiring more entry level or early career professionals.
Why Employers Are Hiring
Aside from the current talent war in the public accounting field since there is a smaller pool of professionals, companies such as Weaver, a Houston-based accounting company, increased revenue during the past couple of years, John Mackel, CEO of Weaver, told TheStreet.
The accounting company plans to add 300 employees to its current headcount of 1,000 employees during its fiscal year, which started on June 1. Weaver will hire employees for positions from associate to partner across its practice groups, including alternative investment, energy compliance, state and local tax, public company, risk and transaction advisory and government consulting practices, he said.
“We’re hiring people at all levels across service lines and locations to help ensure we can meet our clients’ needs,” Mackel said.
The supply demand imbalance in the labor market will continue to decline throughout the second half, Jeanniey Walden, labor expert and chief innovation officer at DailyPay, a New York-based payment platform, told TheStreet. The Job Openings and Labor Turnover JOLTS report from Aug. 2 showed job openings of 10.7 million in June, down one million in just two months.
While employers will continue to hire, companies are being more strategic in which departments and products to invest in, she said.
“You will see increased investment in revenue-generating roles and product development,” Walden said. “The labor market for highly skilled talent remains high and competitive, but very selective.”
The “great retirement” in fields such as health care, education and first responders created a huge gap in finding qualified employee talent in these particular areas, Walden said.
“Economic challenges lead to budget cuts, which restrict the ability to backfill permanent staff,” she said. “More and more private companies and public institutions are going to rely more on cost-friendly contract/freelance workers to fill those gaps as the economy recovers.”
There continues to be “strong spending,” by companies for job ads, Emily Alvarez, a vice president at New York-based Symphony Talent, a recruitment marketing technology company, told TheStreet.
"Employers will likely continue hiring in the second half of 2022 because they are playing catchup to the ‘great resignation,’ which was about people seeking something better whether that meant better pay, less stress, more flexibility or even serving a purpose greater than themselves," she said.
The job market is one of the tightest ones that HR executives have “ever seen,” Alvarez said.
Employers should continue to hire even though the pace is expected to cool from the nearly 400,000 average monthly job growth that occurred since March, Phillip Sprehe, an economist at Geographic Solutions, a Palm Harbor, Florida-based employment software company, told TheStreet.
Job increases will occur at hotels, airlines, restaurants, and event venues as well as in professional office and business jobs, he said.
“The labor market may have enough momentum to withstand the weak GDP figures and the interest rate increases planned by the Federal Reserve to dampen inflation into next year,” Sprehe said.
Consumers continue to shift from buying products online to venturing out for more leisurely activities, which will drive jobs.
“This same shift in consumer behavior is poised to be a detriment to manufacturing employment as seen by the record yearly increase in retail inventories of 17.5% in May,” he said. “Overall pay is expected to rise, but it is unlikely to reach the rate of inflation until next year, meaning wages in real terms should decline in 2022.”
There are now nearly two job openings for every person actively looking for work, Sprehe said.
“Any resulting incremental additions to the workforce would still leave a yawning gap with the number of job openings,” he said. “The obvious speculation is that the pandemic may have structurally realigned industry so that it created a heavy mismatch with the labor market.
Hiring is continuing for technical roles, including engineering and product positions, Dru Kirk, a vice president at Marqeta, an Oakland, California-based card issuing company, told TheStreet. The company has 100 open roles and plans to add more this year.
“Amidst the news of layoffs and hiring freezes at other companies in the fintech and payments industries, we are seeing additional interest in our open positions,” she said.