Add that 14th job to your LinkedIn profile while the getting is good, as the U.S. labor market is poised to markedly slow down later this year, warns Goldman Sachs.
“Softer company-level hiring expectations and slower GDP growth in the second half of the year point to slower payroll growth in coming months,” said Goldman Sachs chief economist Jan Hatzius in a new note on Friday. “Recent anecdotes of hiring freezes and more selective hiring indicate that companies expect payroll growth to slow, and the most recent business activity surveys corroborate these signals.”
Hatzius forecasts employment growth of 215,000 jobs per month for the next three months. That is that poised to cool to 160,000 jobs added a month for the ensuing six months.
This slowdown would see the economy’s pace of growth job fall more than 50% from current levels; through May, nonfarm payroll growth over the prior three months has averaged 408,000.
The U.S. economy added 390,000 jobs in May, above economist estimates for 328,000 but a tick down from an upwardly revised paced of 436,000 in April. May represented the lowest monthly gain in jobs since April 2021.
A slowdown in the red-hot labor market appears to be taking hold as companies begin to hunker down for a potential recession in 2023.
Layoff announcements have risen notably in the tech sector, as companies have come under pressure amid heightened stock market volatility and rising interest rates.
E-commerce site Stitch Fix (SFIX) said Thursday it will axe 15% of its corporate workforce as it deals with a slowdown in sales and increased losses. Electric scooter player Bird (BRDS) announced this week it would layoff 23% of its workforce as it clamps down on expenses.
Netflix (NFLX) and Robinhood (HOOD) have also cut jobs after lackluster first quarters, while Coinbase (COIN) has frozen new hiring and even rescinded some already-accepted job offers.
More than 17,000 workers in the U.S. tech sector have been canned in mass job cuts year to date through June, according to data from Crunchbase.
“The U.S. economy remains strong approaching mid-year,” EY-Parthenon Chief Economist Greg Daco wrote in a note to clients, “but cracks are starting to appear in the foundation.”