When Covid-19 first sent workers home in early 2020, it gave people time to  and how they wanted their jobs to fit into their lives, Mr. Walsh said at the World Economic Forum’s annual event in the Swiss mountains.

Now, with the labor market historically tight, employers will need to find the best ways to draw workers.

“Companies, you have an opportunity to take advantage of the quit rate, if you will, to get them to your company, to recruit them,” he said, referring to the elevated number of times workers quit their jobs in the tight U.S. labor market.

During the pandemic, the share of people quitting their jobs rose to the highest level in records going back to 2000. The rate of new hires also rose to records, a sign that people were switching jobs in high numbers.

In response, firms have rapidly increased pay to draw and keep workers. Year-over-year wage growth exceeded 5% a month for most of 2022 before dipping slightly to 4.6% in December, according to the Labor Department. Despite the robust gains, wages haven’t kept pace with high inflation.

To be successful in today’s hiring market, employers also need to look at benefits and their workplace culture, Mr. Walsh said.

“Companies are starting to look at paid sick leave, they’re starting to look at paid time off, they’re looking at how we do a hybrid model, how does it work?” he said.

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After two straight years of record-setting payroll growth following the pandemic-related disruptions, the labor market is starting to show signs of stress. That suggests 2023 could bring slower hiring or outright job declines as the overall economy slows or tips into recession.

Employers added 223,000 jobs in December, the smallest gain in two years, the Labor Department said Friday. Average hourly earnings were up 4.6% in December from the previous year, thenarrowest increase since mid-2021, and down from a March peak of 5.6%.

Other data released this week point to a slowing U.S. economy. New orders for manufactured goods fell a seasonally adjusted 1.8% in November, the Commerce Department said Friday. Business surveys showed a contraction in economic activity in December, according to the Institute for Supply Management. Manufacturing firms posted the second-straight contraction following 29 months of expansion, and services firms snapped 30 straight months of growth in December.

Despite some signs of cooling, the labor market remains exceptionally strong. The Labor Department recently reported that there were 10.5 million job openings at the end of November, unchanged from October, well more than the number of unemployed Americans seeking work.

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Layoffs at white-collar companies are starting to rise. Now the question hanging over the economy in 2023 is whether that trend spreads to blue-collar industries as interest rates bite.

Average layoffs in finance and insurance from September to November nearly doubled from a year earlier, according to Labor Department . Job cuts picked up by more than 20% among real-estate lessors, brokers and agents over the same period, and by about 14% in the tech-heavy information sector.

Layoff rates in these white-collar industries are still historically low, at 1% of total employment in November, according to the Labor Department, compared with 0.9% in February 2020. Their recent rise, however, contrasts with industries where manual labor is more prevalent and pay lower. Manufacturing, leisure and hospitality and retail all laid off fewer workers on average in the three months through November compared with a year earlier. 

Job growth slowed to a still-robust 223,000 in December, a two-year low, and could fall further this year thanks to higher interest rates engineered by the Federal Reserve to push down inflation.

Even so, many blue-collar workers might fare better than they did in previous downturns. Demand for goods and services, while softening, is still too high for many employers to consider layoffs.

Adjusted for inflation, consumer spending on durable goods has cooled over the past year, but is still running 26% above prepandemic levels. That is helping drive manufacturing hiring despite elevated interest rates, said Andrew Flowers, lead labor economist at recruiting software firm Appcast.

“I expect eventually the construction labor market will probably start to bend but not break. The manufacturing labor market will start to bend but not break,” Mr. Flowers said. “We actually have a better economy than a lot of people think.”

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The union did not disclose how many workers at the two plants rejected the four-year deal, which included wage increases of 25% to 38% according to CNH on Sunday. Still, union members said the proposed contract failed to provide enough of a raise to combat inflation, additional vacation days or better healthcare coverage.

The UAW represents about 1,000 workers at the plants, and union officials had warned a rejection of the latest offer was likely.

“We’re going to notify the company and see if they are willing to come back to the table,” said Yasin Mahdi, the UAW local president in Racine, Wisconsin, where the company employs about 700 people. “I hope the next time they come with a real, bona fide offer.”

CNH officials said the latest offer was its “last, best and final” and in a statement encouraged employees to “reconsider their position in another vote.” The company said it will wait for the union to take the next step.

Workers in May had rejected an offer by the maker of agriculture and construction equipment that included an 18.5% wage increase over three years.

The Italian-American company brought in replacement workers to keep the factories operating once the strike began, union officials said. The plant in Racine, 60 miles (100 km) north of Chicago, makes tractors and combines, while the Burlington, Iowa, facility builds tractor loaders backhoes and forklifts.

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The number of hires rose slightly, while total separations jumped by 182,000. Quits, or those who left their jobs voluntarily, rose by 100,000 for the month to 4.16 million.

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The Canadian economy added a net 81,100 jobs on a seasonally adjusted basis in August, Statistics Canada said. Market expectations were for a 15,000 increase, according to economists at BMO Capital Markets. All of the new jobs created were in the private sector, although more than two-thirds were part-time.

The strong jobs report more than made up for declines that were posted in
the previous two months and is expected to quell talk of an imminent interest-rate cut. While the Canadian economy is likely to slow in the second half of this year, its recent strength contrasts with many other
global economies.

Germany is facing a looming recession, and the British economy contracted in the second quarter amid uncertainty over the country’s departure from the European Union.

The U.S. economy, meanwhile, added 130,000 jobs in August, but the pace of
hiring slowed, likely keeping the Federal Reserve on track to lower interest rates again this month. The U.S. economy has continued to expand at a solid pace despite rising trade tensions and global headwinds.
Source: Wall Street Journal