Zip Recruiter Earnings Call
Peter Boockvar, spoke with the CEO of Zip Recruiter, Ian Siegel. Ian said that the labor market conditions are challenging right now. He said that on a year over year basis, seasonally adjusted hires have declined every month since 2022…meaning we are seeing a steady weakening in the labor market.
He also mentioned that the Quit Rate is 9% below 2019 average at 2.1%, which is also the weakest reading since 2018 when removing covid. This shows that there is less poaching and competition from other companies and is another sign of weakness.
Lastly, Ian explained that the year over year decrease in quarterly paid employees is reflective of reduced demand in small business. ADP has been showing weakness in this category, but the BLS continues to overstate job growth in small businesses through their birth/death model, which just recently added 246,000 jobs.
Initial Jobless Claims
Initial Jobless Claims, which measures individuals filing for unemployment benefits for the first time, fell 17,000 to 233,000, coming off the highest level in a year.
Continuing Claims, which measures Individuals continuing to receive benefits after their initial claim, rose 6,000 to 1.88M, the highest levels in almost three years. This shows that once laid off, it’s harder to get a job, because of less hiring. One again, this figure is likely understated as well, because people that went on benefits from 6-9 months ago are now falling off this because their benefits are expiring. You only fall off continuing claims one of two ways – You get hired or your benefits have expired. Continuing claims is another sign of weakness in the labor market.
Richmond Fed President Barkin (voting member)
Voting Fed member Tom Barkin, spoke yesterday and addressed the selloff and volatility in the Stock market. He said that he didn’t believe there was something monumental that happened to the Stock market, likely trying to speak against the pressure for a mid-meeting rate cut. He thinks the Fed has time in a relatively healthy economy to figure out if we are gently moving into a normalizing state where you can steadily cut rates or if we are in a situation where you have to be more aggressive and “lean” into it.
On inflation – “All the elements of inflation seem to be settling down and I’m relatively hopeful based on the conversations I’m having that that’s going to continue.”
Kansas City Fed President Jeff Schmid (non-voting)
KC Fed President Schmid, who is one of the more hawkish Fed members, said yesterday that recent encouraging data showing inflation around 2.5% gives him more confidence inflation is headed to the Fed’s 2% goal.
“If inflation continues to come in low, my confidence will grow that we are on track to meet the price stability part of our mandate, and it will be appropriate to adjust the stance of policy,” he said.
Schmid also said that the labor market is noticeably cooling but still healthy.
Chicago Fed President Austan Goolsbee (non-voting)
Goolsbee also addressed the pressure some have been placing on the Fed to do a mid-meeting cut – “We’re not in the business of responding to the stock market. We’re in the business of maximizing employment and stabilizing prices.”
He reiterated his view the central bank’s policy is too tight, and by leaving the Fed Funds Rate where it is as inflation falls they are making the policy even more restrictive, which could harm the economy and labor market.