October 2023 Labor Market & Economy Report: Inflation Down 0.5% Year-over-Year; Labor Market Tightness Easing; Monetary Tightening Persists

By Mike McGuire | November 20, 2023

At a high level, not much changed in U.S. labor market and economy from September to October.

Unemployment went up slightly. Job growth slowed but was still strong. The Fed didn't raise or lower interest rates. Inflation stayed the same but it’s down 0.5% year-over-year.

Regionally, most districts contacted for the Federal Reserve's Beige Book reported that although labor market tightness and wage demands are easing, recruiting and hiring skilled tradespeople remains a challenge.

On the financial side, the Fed's survey of senior loan officers indicated that tighter standards and weaker demand for residential, commercial, and industrial loans persisted in the third quarter, with bankers citing "a less favorable or more uncertain economic outlook" being among the most common reasons why.

In industry-specific news, the United Auto Workers reached a tentative deal with the Detroit Big Three automakers, effectively ending its six-week strike. What remains unsettled are the strike's implications for suppliers and the supply chain.

What to watch for...

New Rule Requires Stricter PFAS Reporting and Record-keeping in U.S.

A new rule enacted by the U.S. Environmental Protection Agency (EPA) took effect November 13 that requires all manufacturers and importers of PFAS, a.k.a. “Forever Chemicals,” to provide reports on PFAS uses, production volumes, disposal, exposures, and hazards for every year dating back to January 1, 2011. In some cases, companies will have to provide records that date back even further.

Failure to comply with the rule could result in fines of up to $50,000 per day, per violation, as well as potential criminal penalties.

Affected industries include but are not limited to consumer and industrial products, transportation, life sciences, and aerospace and defense.

The deadline to comply is May 8, 2025. Reporters can start filing November 12, 2024.

Be on the lookout for an in-depth Q&A coming soon with Actalent chemical engineering expert Peter DeSanto that dives deeper into the EPA's new PFAS rule: who it applies to, how it defines PFAS, what it requires, and how Actalent is positioned to help companies comply without disrupting or adding strain to their core business activities.

For comprehensive coverage of PFAS in general, read Actalent's ongoing PFAS Q&A series "Forever... For Now" part I, part II, and part III with chemical engineering expert Alison Fraser.

More Tech Layoffs?

Since 2022, more than 275,000 tech workers have lost their jobs. That includes 7,331 layoffs last month. According to TechCrunch, tech layoffs could continue as investors shift from a "growth" to "efficiency" mindset.

Of potential interest to those looking for tech talent, here's a running list from layoffs.fyi that documents the tech layoffs by employee, position, company, number of layoffs, location, date, industry, and more.

Panama Canal Restrictions

Due to a historic drought, the number of ships allowed to use the Panama Canal per day will gradually be cut in half by February. The size and weight of each ship will also be limited.

The restrictions are forcing ships to take longer routes – potentially adding upwards of 9,000 miles one way -- or incur wait times that right now vary from nine days to nine months.

Between 5% to 6% of the world’s trade is estimated to pass through the canal and approximately 70% of it is a U.S. import or export. With winter and the holiday season approaching, U.S. manufacturers, wholesaler, retailers, consumers, and, maybe most of all, U.S. natural gas exporters and customers, will be watching to see how supply chains are affected.

The Freight Broker Bubble

Since October 2022, the trucking industry has lost 41,000 jobs amidst an ongoing trucking recession, including 5,000 layoffs last month.

Citing the recession and monetary tightening as reasons, digital freight broker Convey Inc. folded its operation in October.

In somewhat unusual news, even for the volatile world of trucking, the price reporting agency FreightWaves is predicting that more freight brokers are also likely to fold in the coming months.

All told, trucks move roughly 72% of freight in the U.S. and freight brokers facilitate about 20% of that business.

Retail sales dipped 0.1% last month but with retail prices easing into the holiday shopping season and new orders for durable goods on the rise, two questions remain:

-Will shipping demand outpace the number of available trucks and truckers compared to last year?

-Will more shipments be lost, delayed, or harder to coordinate if more freight broker’s fold?

Proposed Labor Rule Affecting Gig Workers: Still No Update

A Department of Labor rule proposed last year that narrows the definition of an independent contractor was supposed to be finalized in October, but still no updates. Opponents of the rule argue it will disincentivize gig work, while proponents argue it will protect workers from labor law abuses. Stay tuned.

A Look at Employment Trends in Engineering and Sciences

Actalent's monthly Labor Market & Economy Report offers a comprehensive look at labor market trends, including trends across all the industries we support: Automotive, Aerospace & Defense, Architecture & Engineering, Consumer & Industrial Products, Construction, Healthcare, Scientific R&D and Utilities.

Unemployment rates by industry: Unemployment rates by labor category:
Overall unemployment: 3.9% Software-Hardware-IT-& Mathematics: 2.2%
Hospitals: 1.4% Architecture & Engineering: 2.4%
Utilities: 2.2% Sciences – Life, Physical, & Social: 1.6%
Professional & Technical Services: 2.7% Unemployed workers per job opening in STEM categories: 0.33
Manufacturing: 3.0%
Construction: 3.9%

Connecting the Dots

For Life Sciences, learn which medical device manufacturers reported strong Q3 performances in Actalent’s Labor Market & Economy Report. Also find out which pharmaceutical giant is planning to close several locations as part of a $3.5B cost realignment program.

In Aerospace & Defense read about who’s behind plans for a new $2B aerospace R&D campus in Silicon Valley and how uncertainty around the future of government spending is impacting defense contractors.

Actalent’s Labor Market & Economy Report is a comprehensive look at STEM labor market trends, including trends across all the industries we support: Automotive, Aerospace & Defense, Architecture & Engineering, Consumer & Industrial Products, Construction, Healthcare, Scientific R&D and Utilities.

References: Actalent's October 2023 Labor Market & Economy Report synthesizes information from a variety of sources including the United States Bureau of Labor Statistics survey results, Lightcast (formerly Emsi-Burning Glass), media reports, industry intelligence, company earnings reports, and external labor market data. The full set of data and references are included as a companion to this article.

If you'd like more information on the data presented, or have questions about the information provided in this report, please contact our team at: content@actalentservices.com.

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