Area chart showing total nonfarm workers from January 2006 to December 2023. The number of workers decreased sharply at the start of the pandemic but has since recovered and as of December 2023 exceeds the pre-pandemic peak.
Line chart showing the unemployment and underemployment rates from January 2006 to December 2023. Both rates rose sharply with the start of the pandemic and fell below the pre-pandemic lows in mid-2023. Both rates have increased above their pre-pandemic lows.
Line chart showing job openings and hires from January 2006 to November 2023. Hires had been on an uptrend since the end of the prior recession until 2022. Hires have trended lower since then. Openings had surged since the onset of the pandemic. Job openings have been declining since 2022 but remain above 2020 levels.
Area chart showing the labor force participation rate from January 2006 to December 2023. It had fallen in the years following the Great Financial Crisis but stabilized around 2014 before sharply declining during the onset of the pandemic. Participation has increased since 2020 but remains well below the pre-pandemic level.
Sources: Bloomberg and Wells Fargo Investment Institute. Monthly data from January 1, 2006 to December 31, 2023. JOLTS hires and job openings: monthly data from January 1, 2006 to November 30, 2023. JOLTS = Job Openings and Labor Turnover Survey. Shaded area represents a U.S. economic recession. SA = seasonally adjusted.
Key Takeaways
- The gap between job openings and unemployment has narrowed, but remains wide, signaling a still tight labor market.
- Our view is that the labor market will slowly soften further into 2024 as worker shortages subside and businesses reduce the pace of hiring in the face of slowing economic growth.