Job market could see significant shift in July, AI-driven report predicts
After a strong jobs report in June, July could see a shift in the type of hiring employers are looking for, according to new data from an AI-driven forecast from Turn.
In the next jobs report, Turn predicted that the unemployment rate will fall to a seasonal low of 3.5% due to a 64.7% increase in hiring in June, a trend that could continue through the end of July. Turn predicted a significant shift away from filling hourly, pandemic-related jobs, such as warehouse positions, after hiring for traditional economic roles such as retail workers and janitorial services surged 210% in June.
Turn also predicted a rise in hiring for semi-skilled hourly and salaried jobs in July such as mechanics and nurses. While hiring for these positions accounted for just 11.5% of monthly jobs over the past 12 months, Turn predicted that these jobs will make up 22% of all new hires in July.
“There was a major shift to semi-skilled labor in the month of June 2022 where both hiring and job growth increased 171%,” Turn stated in its report. “The greatest growth positions were nurses, pharmacy technicians, mechanics and Class A truck drivers. Turn predicts the upward trend of hiring semi-skilled workers will continue through July 2022.
The latest employment report from the Bureau of Labor Statistics (BLS) showed that total nonfarm payroll employment increased by 372,000 in June while the unemployment rate remained at 3.6% for the fourth consecutive month. This was spurred by job gains in professional and business services, leisure and hospitality and health care.
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Here’s where hiring is expected to increase the most
When looking at the top businesses fueling semi-skilled hourly and salaried jobs growth, Turn found 511 companies that each contribute a median of 3,300 jobs to the economy. Here are a few companies that Turn predicted will grow through the end of July:
- Amazon: 261% job growth across 7,800 locations
- Driveline Retail Solutions: 269% job growth across 3,900 locations
- Walgreens: 20% job growth across 5,300 locations
- Great Clips: 12% job growth across 6,500 locations
- Dollar General: 51% job growth across 4,300 locations
In addition, here are the top five cities expected to have the strongest month-over-month job growth from June to July:
- New York, NY: 18.8% job growth across 29,300 companies
- Sacramento, CA: 16.3% job growth across 3,900 companies
- Seattle, WA: 14.4% job growth across 8,100 companies
- San Diego, CA: 11.8% job growth across 7,500 companies
- Arlington, TX: 11.3% job growth across 4,800 companies
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What job growth means for interest rates
As the U.S. job market transitions back to pre-COVID-19 levels, rising inflation will increase the demand for hourly employees, according to Turn’s data. A strong job market, in addition to inflation, is another incentive for the Federal Reserve to raises interest rates.
Inflation is currently at a 40-year high, with the Consumer Price Index (CPI) having increased by 9.1% annually in June. This will likely lead the Federal Reserve to continue on its current path to raise interest rates again, despite the ongoing recession risk.
The Federal Reserve recently released the minutes from its June meeting, showing that another 75-basis point rate hike could be on the table at its next Federal Open Market Committee (FOMC) meeting in July. In June, the Fed raised rates by 75 basis points, the highest increase since 1994. This was the third interest rate hike of 2022 and pushed the federal funds target range to 1.5% to 1.75%.
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