No matter what your career or position, the economy has a foothold not just on your business success, but also on your daily life. As 2023 comes to a close, newly released statistics and information have arrived to give us a glimpse into what the new year might look like. Two economic factors – inflation and unemployment – have been especially volatile over the past few years, but trends are changing! With the future in mind, let’s break down what the economic outlook and current job market mean for us.
November 2023 CPI results
On December 12th, the U.S. Bureau of Labor Statistics released a Consumer Price Index (CPI) update for November 2023. Being the final inflation update that we’ll see this year, it may give us an idea of what to expect economically in the upcoming year!
November 2023’s year-over-year CPI report shows that the cost of all items increased by 3.1%, a steep fall from November 2022’s report of a 7.1% year-over-year increase. Despite being a great step in the right direction, we remain well above the federally targeted inflation rate of 2%.
Multiple items play a part in maintaining the still-high “all items” count, including consumer-facing costs such as medical care commodities (+5.0%), shelter (+6.5%), and transportation (+10.1%).
Some categories experienced significant dives in rate. Fuel oil, for example, dropped from a whopping +65.7% year-over-year last November to -24.8% between November 2022 and November 2023. Additionally, the costs of energy services declined from +14.2% to -0.1% within the same period.
Overall, inflation is easing up, but we have a long way to go before we can call it safe!
What’s with the job market?
Statistically, the job market is in a great place compared to recent years! At 3.7%, our current unemployment rate has dropped substantially from the record-high COVID-era unemployment numbers reaching up to 14.7% (April 2020). This recovery has been vital to employees and employers alike, prompting job growth and fueling the economy!
Statistics aside, If you or someone you know has been looking for a job or looking to hire, you may feel like it’s been rocky terrain navigating employment lately. Many unemployed people are having a hard time finding a job that fits, and employers are having a hard time filling positions! With over 8.73 million job openings reported at the end of October 2023, what’s causing this rift in the job market?
Cost of living:
Many of those in the workforce are facing personal issues that leave lower-paying, fewer-benefits jobs out of the equation. With high housing costs and other inflationary pressures, many are forced to continue searching for career options with opportunities to make ends meet.
The diploma dilemma:
While weighing their options, many college graduates are finding that many entry-level positions requiring their education level or higher are offering the same compensation as retail and fast food workers. So, they keep looking! The current cost of living is not the only factor in their decision, but also the time and money put towards earning their degree. Many young people entering the workforce are wondering whether a college education is worth it, given they can earn the same pay now as they could make with a degree. Along with this, positions that could easily be filled are restricted by unnecessary degree requirements, turning away otherwise qualified applicants.
Remote work craze:
The number of job seekers in the market for remote work is growing by the day. Remote work creates a more accessible workplace and offers a range of benefits for both the employer and the employee. If you’d like more information on how remote work can benefit you, check out our article discussing remote work with a focus on accessibility. Unfortunately for many job hunters, remote positions are limited and can often be difficult to secure.
Many businesses are working to change their benefits, policies, pay, training practices, and hiring processes to accommodate the changing needs of the workforce. We are in an unprecedented new era of business as employers embrace a more flexible, employee-centric approach and adapt to new ideas and technologies as they evolve.
What does the future hold?
Our battle with inflation is destined to continue, but the future is foggy. Multiple government organizations are working together to solve the issue, but experts warn that one wrong move could change everything. According to the Federal Reserve Bank of New York, there is a 52% chance that the U.S. will fall into recession over the next year. Even if we can avoid this recession, experts say it is likely that we will see only a very slow decline in inflation rates over the next few years.
Inflation and employment rates often work in tandem, each one affecting the other. While the current job market presents itself as stable, its state in the next year or so will depend on where we stand with inflation.
The economy is in a fragile state, but there’s no need to panic! It’s not always black and white regarding predictions, even when you look at prior trends. As we’ve seen firsthand over the past few years, the inflation rate ebbs and flows in response to world and national events. While we may not know the future for certain, studying economic reports and trends can keep you in the loop and prepared for any outcome!