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Has the Job Market Cooled Off?

By Daniel B. Kline - Feb 6, 2020 at 8:49AM

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The number of openings has fallen for two straight months.

A  couple of cracks have appeared in an otherwise healthy economy. The question is whether those cracks -- a declining number of job openings and lower median pay compared to last month -- will spread, or whether it's just a minor nuisance that's not indicative of bigger problems.

Job openings dropped by 3.1% January, according to Glassdoor's latest Job Market Report. That's the biggest decline in three years and the second straight month of year-over-year declines. Glassdoor Senior Economist Daniel Zhao offered some color on where the job market stands:

Pay growth accelerated in January, rising to 2.6% year-over-year from 2.3% in December. However, this acceleration is largely driven by a decrease in pay in the same period last year. When looking at pay on a month-over-month basis, pay has actually declined to $54,430 per year, down slightly from December levels. This suggests that the acceleration in pay growth is short-lived and will likely dissipate in coming months.

It's a mixed bag of numbers that do not tell a complete picture. The economy has shown some weakness, but that's relative given how healthy it was heading into this year.

A person searches for a job.

The job market has slightly cooled. Image source: Getty Images.

Which jobs are paying more?

While the pay picture has been mixed, some jobs have seen big increases. As has been the general case over the past two years, the biggest increases happen in jobs that pay below the median salary for all workers. Only three of ten jobs on this list paid above the median, and only one, UX Designer, was meaningfully higher.

Top 10 Job Titles With Fastest Pay Growth

Job Title Median Base Pay YOY %
Loan Officer $53,494 14.1%
Sales Representative $51,619 6.3%
Security Officer $37,881 5.9%
UX Designer $79,358 5.1%
Producer $55,739 5%
Recruiter $53,605 4.9%
Financial Advisor $56,801 4.6%
Machine Operator $41,065 4.5%
Technician $49,041 4.3%
Emergency Medical Technician $36,163 4.3%

Data source: Glassdoor. YOY = year over year.

What does this mean?

It's fair to say that this news is somewhat troubling but it's also not a clear sign that a recession is coming. Zhao explained why people should be at least a little concerned:

As the new year kicks off, Glassdoor data indicates the labor market is slowing as the reservoir of new job openings starts to lose water. While the level of job openings is still high, the clear downward trend is a worrying sign that employer demand is faltering in 2020. Additionally, pay growth will likely moderate over the next few months as we pass the weak comparable period from last year.

Concern, it should be noted, is not panic. Seeing the job market cool down from historic highs does not mean it's going to collapse. It's still a good time to be an American worker (at least in some fields) so, while there are reasons to be wary, this could just be a dip that never becomes a major fall.

Yes, the job market has cooled off. That, however, is relative. Being less healthy does not make you unhealthy.

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