In case you haven’t heard, the booming job market of the post-pandemic era has officially come to an end. Earlier this week, the US Labor Department reported that job openings are the lowest they’ve been since January 2021, when much of the country was still under COVID lockdown rules. The unemployment rate now stands at 4.3%.
The experts are starting to worry, maybe even panic a little. This goes for the public sector as well as the private sector.
“The labor market is no longer cooling down to its pre-pandemic temperature, it’s dropped past it,” one private-sector hiring expert told CNBC. “Nobody, and certainly not policymakers at the Federal Reserve, should want the labor market to get any cooler at this point.”
There also seems to be a sense of panic among new college grads. The mainstream media is full of articles about the difficult time young people are having, navigating the abruptly tighter job market.
I can understand a sense of disappointment. Anyone who will graduate next spring (2025) effectively missed the boom, after all. The best time to graduate with a newly minted college degree was in 2022 or 2023, when corporate employers were scrambling for people, and paying signing bonuses.
It’s important to remember, though, that unemployment rates of the last two years, which have been well under 4%, are not the historical norm. In the university economics courses I took in the late 1980s (which are admittedly dated in 2024), we were taught that an unemployment rate of 5 percent is the acceptable baseline.
I was a new college graduate in 1991. The unemployment rate was then near 7%. Was it difficult to find a job? Sure, a little. But I managed to find one. So did most of my friends. And I’m not only talking about people with the most in-demand majors. My degree was in economics. I knew people who found jobs with communications and English degrees.
Based on the numbers, the job market is not “bad”. (As a new college grad in 1991, I would have regarded a 4.3% unemployment rate as a vast improvement in my situation.) Rather, the job market has simply returned to something approaching “normal”. It was unrealistic to believe that the job market was going to remain in its 2022-2023 state, with job seekers holding all the cards.
But if you were a job seeker during that time, it was sure nice while it lasted.
-ET
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