March Jobs Report Preview: Slower and Still Steady
Daniel Zhao
Chief Economist at Glassdoor | Apr 4, 2023
This Friday, the Bureau of Labor Statistics (BLS) will release the March jobs report. After March was marked by a banking crisis and more layoffs at major companies like Meta, Amazon, and McKinsey, the March jobs report is expected to show a resilient labor market supporting ongoing jobs growth despite the gloomy headlines. Despite turbulence in the banking industry, the labor market has been slowing more gracefully as hiring and wage growth slow.
Here are four trends we'll be watching for in the March jobs report:
- Jobs growth to decline slightly. Job gains slowed to 311,000 in February, down from the sudden spike of 501,000 jobs added in January. Job gains will likely continue to decelerate in March as the labor market continues to cool slowly.
- Unemployment rate flat. The unemployment rate is likely to remain unchanged in March at 3.6 percent, but it is possible that the rate may tick up or down as it hovers near historic lows.
- Wage growth to slow to 4.3 percent. Year-over-year average hourly earnings growth jumped to 4.6 percent in February as we lapped a weak period of wage growth last February, but this effect is likely to reverse in March and return wage growth to 4.3 percent.
- Don’t expect any impact from the failure of Silicon Valley Bank yet. The crisis unfolded late enough in the month that it likely did not show up in the reference period for the jobs report surveys.
Headlines in March have sparked deeper economic concerns with the collapse of Silicon Valley Bank prompting concerns about a wider banking crisis. While it’s too early for the impacts of the SVB failure to show up in the jobs report, the turmoil offers clarity into how a recession may evolve. As interest rates rise and introduce concerns about financial stability, business lending may decline, stemming economic growth and forcing businesses to pull back on hiring plans. Until now, how a recession may start was unclear, but the recent banking troubles shows that economic weakness can sharpen into focus suddenly.
Special Topic: Remote Work Faces its First Economic Test
As the labor market is expected to slow in the coming months and a potential recession looms, the new remote world of work faces its first economic test. Some companies have pulled back on remote or hybrid work options and as the labor market cools, workers may face the unpalatable choice of returning to the office or risking their job security. Some have even raised the idea of “remote handcuffs”, where remote workers feel stuck in a bad job because they are only considering a shrinking pool of remote jobs.
However, a downturn is unlikely to return us to the pre-pandemic world of work. For example, some employers have taken advantage of remote work options to cut back on office space and related expenses. Additionally, remote work significantly expands the pool of workers that employers can reach, giving them access to premium talent without having to pay New York City salaries.
And from the job seeker side, interest and satisfaction in remote work among employees remains as high as ever. Recent Glassdoor research found work from home arrangements are among the top three highest-rated benefits for more than two-thirds of employers (68 percent) on Glassdoor in 2022. And on Glassdoor, the share of applications started for remote job listings is at a record high of 21 percent as of March 28, 2023.
However, the idea of “remote handcuffs” points to a real phenomenon, but one that is not exclusive to remote workers. A cooling labor market means that all workers have fewer options and have to evaluate whether they're willing to stomach their current job's imperfections as the pool of alternatives starts to shrink.
Methodology
The chart shows the share of U.S. applications started on Glassdoor for job postings where the location is explicitly listed as “Remote” from January 1, 2019 through March 28, 2023. This likely underestimates the share of applications started for jobs that are remote/hybrid-friendly as employers may post a job locally but clarify in the job description or interview process that remote/hybrid work arrangements are available.
Daniel Zhao
Daniel Zhao is Chief Economist at Glassdoor. On Glassdoor's Economic Research team, he has conducted research using Glassdoor's unique data on a variety of topics affecting job seekers and employers ranging from the health of the job market to pay transparency to employee engagement & retention. His work has been cited in publications like the New York Times, the Harvard Business Review and more. Prior to joining the Economic Research team, he also worked on improving the user experience for Glassdoor’s consumer jobs product and mobile app. He holds a bachelor's degree in applied mathematics and economics from Harvard College.
Tags:Labor MarketUnemployment
