In the wake of the COVID-19 recession, the job market is booming. Workers have exercised historic bargaining power. Phrases like “mass resignation” and “quiet retirement” have entered American vernacular, and the unemployment rate has hit a 54-year low.
But that’s no longer the case today. The U.S. job market has been gradually weakening in recent months, and the latest jobs report confirms that. The number of employees added much fewer jobs than expected in July, at just 114,000. This is the third time in the past eight months that employment growth has fallen below 200,000. Meanwhile, the unemployment rate unexpectedly rose 0.2 percentage points to 4.3 percent.
But the slowing job market isn’t completely deterring workers from seeking new opportunities in the coming year. Nearly half (48%) of the workforce (i.e., those working full-time or looking for full-time employment) say they’re likely to look for a new job in the next 12 months, according to Bankrate’s new Job Security Survey. Many workers also say they’re likely to seek higher pay and more flexible work in the coming year.
This is not the booming job market that coincided with the economic reopening a few years ago. Rather, it is more consistent with the conditions experienced prior to the pandemic.
— Mark Hamrick, Senior Economic Analyst, Bankrate
Bankrate’s take on the U.S. employment outlook
- Despite the slowing job market, nearly half of workers are looking at new employment opportunities. Forty-eight percent of workers say they are likely to look for a new job in the next 12 months, down from 56% in March 2023.
- Workers prioritize pay and flexibility. Forty-three percent of workers say they are likely to ask for a pay increase at work, and 42% plan to ask for more flexible working hours, such as modified hours or the ability to work from home or remotely more often.
- The job market has cooled since the Fed began raising interest rates in March 2022. 21% of the workforce say their employment/career situation has gotten worse since the Fed began raising interest rates in March 2022. 57% say it’s about the same, and 22% say it’s gotten better.
- Amid the Federal Reserve’s interest rate hiking cycle, job security is a concern. Seventy percent of workers said they are at least somewhat worried about their job security since the Fed began raising interest rates in March 2022.
Nearly half of workers say they are likely to look for a new job within the next 12 months, especially younger workers.
There’s no denying that the job market is slowing. With unemployment rising, fewer Americans leaving their jobs, and wage growth slowing, workers no longer have the bargaining power they had after the pandemic. But that doesn’t mean the job market is in dire straits or that Americans aren’t still looking for work. According to Bankrate analyst Sarah Foster, the job market may just be normalizing back to what workers experienced pre-pandemic.
“I often suspect that workers have become accustomed to the historic bargaining power they have post-pandemic,” Foster said. “Once you get a taste of that, it’s hard to go back. A more ‘normal’ labor market may feel more unnaturally worse than it actually is.”
Over the next 12 months, nearly half (48%) of working Americans say they are likely to look for a new job that:
- 23% said it was very likely
- 25% answered “somewhat likely”
Notably, this year’s figure is down from 56% when Bankrate last conducted this survey in March 2023, which could be a sign of a cooling job market. More than half of U.S. workers (52%) say they are unlikely to look for a new job in the next 12 months, including those who:
- 25% said it was “not likely”
- 27% said it was not at all likely
*(e.g. changes to working hours, increased frequency of working from home/remotely, etc.)
Notes: The percentage is the percentage of U.S. adults who are employed full-time or want to be employed full-time.
sauce: Bankrate Survey, July 23-25, 2024
Younger workers, including millennials and Gen Z, make up a significant portion of the U.S. workforce and are more likely to change jobs than other generations. A Bankrate survey found that younger workers are more likely than older workers to look for a new job in the next year. Here’s the generational breakdown:
- 64% of Gen Z workers (ages 18-27)
- 52% of Millennial workers (ages 28-43)
- 45% of Gen X workers (ages 44-59)
- 25% of workers in the Baby Boomer generation (ages 60-78)
Higher wages and greater workplace flexibility are also big priorities for workers in the coming year, especially among younger workers: 43% of workers say they are likely to ask for a pay increase at work, and 42% plan to ask for more flexibility in their jobs, such as the ability to modify their working hours or work from home or remotely more often.
Millennial and Gen Z workers are more likely than older workers to ask for a raise at work.
- 52% of Gen Z workers
- 54% of millennial workers
- 34% of Gen X workers
- 25% of Baby Boomer workers
Some workers are also planning to change jobs in the next 12 months: 25% of workers may leave their job in the next 12 months, and 22% may move to change jobs.
Nearly three in ten workers (29%) are likely to start a business within the next 12 months, with these young workers planning to become entrepreneurs:
- 41% of Gen Z workers
- 34% of millennial workers
It’s refreshing and encouraging to see so many people planning to start their own businesses. Innovation and entrepreneurship are key to the success of the American economy and financial markets.
— Mark Hamrick, Senior Economic Analyst, Bankrate
About one in five workers say their employment situation has gotten worse since the Fed began raising interest rates.
The Federal Reserve is a major factor in the weakening labor market. As the Fed raises interest rates to fight inflation, the economy is slowing, unemployment is rising, and monthly job creation is declining.
Bringing the labor market from a boiling point to a simmer is one of the Fed’s goals: The central bank doesn’t want the labor market to return to its previous overheated state, which could make it harder to hit its inflation target.
— Sara Foster, Bankrate Economic Analyst
Roughly one in five workers (21%) believe their employment/career situation has gotten worse since the Fed began raising interest rates in March 2022. Meanwhile, a majority of workers (57%) say their situation has stayed about the same, and 22% say their situation has gotten better.
Younger workers are more likely than older workers to say their career situations have improved since the Fed’s rate hiking cycle began.
- 30% of Gen Z workers
- 26% of millennial workers
- 15% of Gen X workers
- 15% of Baby Boomer workers
Notes: The percentage is the percentage of U.S. adults who are employed full-time or want to be employed full-time.
sauce: Bankrate Survey, July 23-25, 2024
Workers have been feeling anxious about their job security since the Federal Reserve began its interest rate hiking cycle.
Some workers are worried about their job security. While layoffs have not been widespread and remain at record lows, “there is an undeniable social component to job security anxiety” in today’s job market, Foster said.
“Americans see LinkedIn posts, and many know people who’ve been laid off,” she says. “Even when the unemployment rate was at a half-century low that wasn’t higher than it was before the pandemic, Americans had the perception that the job market was much worse than it actually was.”
Since the rate hike cycle began, 70% of workers have some concerns about their job security, including:
- 42% said their level of worry has not changed
- 28% said they were more worried
- 16% said they were less worried
Only 15% of workers said they are not worried or have never worried about their job security since the Federal Reserve began raising interest rates.
Some generations are more likely to be concerned about job security than others. Here are the generations that said they were most concerned about job security:
- 36% of Gen Z workers
- 29 percent of Gen X workers
- 28% of millennial workers
- 18 percent of Baby Boomer workers
Note: Percentages are the percentage of U.S. adults who are working full-time or looking for full-time employment. Percentages do not sum to 100 due to rounding.
sauce: Bankrate Survey, July 23-25, 2024
Three ways to successfully change jobs in a sluggish job market
The job market has slowed from its boom years, and finding a new job may be harder than it was a few years ago. But it’s not impossible. Here are three steps anyone should take when looking to change jobs, especially in this weakened job market:
- Leverage your network: When searching for your next job, your network is one of your greatest assets. Reach out to old colleagues, reach out to people in your industry, and reach out to recruiters to show them you’re interested in new opportunities. Recruiters may be able to help you with your job search and speed up the process by answering questions, providing feedback on your resume, or introducing you to specific jobs.
- Have a sufficient emergency fund: It can take several months to land a job, from application to hiring. Before you start your job search, make sure you have 3-6 months’ worth of living expenses saved up in a high-yield savings account in case of an emergency. An emergency fund can be a lifeline if you suddenly lose your job or have to deal with large unexpected expenses while changing jobs.
- Always negotiate for higher wages and better benefits. Job seekers’ negotiating power may not be as strong as it was a few years ago, but negotiation is still important. Recruiters will often expect candidates to negotiate their compensation package, so you should be prepared with your ideal salary and other non-negotiables. Make sure your requests are backed up by research, experience, and conversations with people in the industry.
