July 17, 2024
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What to Expect in the 2022 Job Market

Economists make projections; fools make predictions. As I am neither (so I care to believe), I’ll make neither. On the other hand, as an independent career coach for 25 years this May—and having watched the job market closely, constantly, and diligently over the years—what I can do is offer some observations that might help guide us to reasonable expectations for 2022.

The backdrop is simple: 2021 was—without question and by far—the greatest year in the history of the American job market. From the time the Bureau of Labor Statistics (BLS) began measuring and reporting in 1939, the previously highest job creation level in one year occurred in 1946, when 4,263,000 jobs were created. That is, until 2021, when that number was surpassed (blown out of the water is a better term) by July, on the way to 6,448,000 new jobs for the year.

The strength of the job market can’t be fully appreciated by that number alone, even though smashing the previous record by more than 50% had never been done. Looking at data from the BLS Job Openings and Labor Turnover Survey (instituted in 2000), we see that the open jobs level of 11 million has more than doubled; the hires rate, which peaked at a record 4.7% in June, remains at a historic level of 4.5; the voluntary quits rate, a sure sign of confidence in and strength of the market, has never been higher, now 3%; and the layoffs rate, a sure sign of stability and employee power, is 0.9%, never lower.

In a word—fantastic. Yet some pundits and prognosticators have their doubts. For instance, the job creation numbers for November and December—249,000 and 199,000—disappointed just about anyone who (a) sees things through the wrong end of the telescope, and (b) is within reach of a keyboard. The number of people who called the year-end numbers “disappointing” was disappointing in and of itself. They said the tail-off was because of COVID, supply chain issues, and so forth, when they should have been focusing on the fact that the year was such a huge success in spite of all that. It makes a big difference to readers and listeners, especially in shaping attitudes going into a job search.

All that taken into account, 2022 will have a dual personality. For one thing, it won’t keep up the hiring level, especially since unemployment has fallen to 3.9%, a pre-pandemic level. But even if the job creation level is cut in half, 2022 will still come in at the 11th best year in history. Not every year can be the best—that’s what averages and trends are all about—but strength is strength.

We can count on a couple of countervailing forces. The omicron variant is still here, although we should see that diminishing by spring.

Inflation, which hit 7% last year, highest since 1982, went from zero to 60 in five seconds (as they say in auto racing) and caught almost every economist by surprise. It was a result, among other things, of the relief package earlier in the year, a good thing by all accounts, but it did overheat the economy. A couple of interest rate hikes by the Fed will reign that in, but at a slower pace than it came on.

That economic revving, though, also led to increased hiring and a drop in unemployment that was three times as fast as the recovery following the Great Recession of 2008-09. This, in turn, led to rising incomes, rising wages, rising spending and GDP growth. A good trade-off, for sure.

And then there’s the matter of the midterm election, a phenomenon that unfailingly disturbs the job market. But this year, it will be particularly crazy, no matter what your political leaning. The tremors of a midterm election are usually felt in the second and third quarter of the year, by the way.

Forces that will support continued job market strength include the infrastructure bill, which will hit the streets this year; surges in American innovation, a driver of investment and job creation; and continued emphasis on American competitiveness in manufacturing, which we’ve been seeing these past two years.

All in all, without the pretense of projection, it is reasonable to expect that 2022, although not equal to 2021, will be another good year for the job market.

In 1928, there were some who were disappointed by Babe Ruth’s 54 home runs, a 10% drop from his record-setting 60 in 1927. But the fact remains that he did hit 54 dingers.

2022 will be that kind of year.


Career coach Eli Amdur provides top-notch one-on-one coaching in job search, resumes, interviewing, career planning and executive development. Reach him at [email protected] or 201-357-5844

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