At the beginning of every month the Bureau of Labor Statistics releases the Employment Situation Summary. Generally, this report contains information regarding the growth or contraction of employment and wages for the previous month. This data sheds light on employment trends, which are valuable across many industries. Jason Kennedy, partner at Loop Recruiting, weighs in below on his key takeaways from the most recent Employment Summary.

The workforce participation rate is something that is often overlooked when evaluating the current job/candidate market. The workforce participation rate measures the percentage of adult Americans who are in the labor force, which is to say those who are employed or actively seeking employment. The unemployment rate measures the percentage within the labor force that is currently without a job. A high participation rate combined with a low unemployment rate is a sign of a robust job market. The American job market is currently in relatively good shape with regard to both of those variables. Even through a global pandemic, we have only seen the workforce participation rate drop by 1% since 2019 and the unemployment rate has increased only slightly since 2019.

So, the question a lot of companies ask is, “Where did all the candidates go?” The answer is complicated but one factor to consider is how many hours people are working. Although Americans have reduced the number of hours they work since the 1950s, the average plateaued in the 1980s and hasn’t shifted until recently. In 2021, the average American worked 1,790 hours annually (down 7% from 2020) and it appears this trend has continued into 2022/2023. The short answer to a long and complicated question is that the workforce participation rate has declined but is not entirely to blame for the increase in open/vacant positions (currently at 10.5M). The primary culprit is the decline in working hours among the current active workforce. Companies that can solve this problem will be at an advantage in 2023.