November 2022 Market Brief: What Taylor Swift Has in Common with the US Economy & Labor Market

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In the middle of November, 14 million people entered a pre-sale queue for Taylor Swift concert tickets.

Except, there were only 2.4 million tickets available.

That equates to .17 tickets (approximately one-fifth of a ticket if you prefer fractions) for every one hopeful (and now disappointed) concert goer.

Because demand well out-paced supply and people are willing to pay a lot for things they value, resale prices have reached upwards of $30,000.00 per ticket in some locations.

It isn't a match-for-match comparison, but this lesson in Swiftonomics does lend perspective on what's happening in the engineering and sciences labor market right now:

Between September and November there were 1.5 million job postings for engineering and sciences skillsets.

However, there were only 240,000 unemployed people available to fill them, which equates to .15 workers (approximately one-seventh of a person if you prefer fractions) for every one job opening. Which, if you're still following along, reflects greater demand than existed for Taylor Swift tickets.

And while job openings did cool slightly in November, demand for engineering and sciences skills is only expected to go up, even as the economy shows signs of slowing down.

So, what's it worth to companies looking to secure this in-demand talent? Well, for those who want to remain competitive in their markets, a lot. Between the low unemployment rates in engineering and sciences and November's wage increases, companies are proving they'll pay more for the skills they need and value. 

An Overall Look at the Economy and Labor Market

Job Growth and Unemployment. The economy added 263,000 jobs in November, once again exceeding expectations. Even last month's estimates were revised upward (from 261,000 to 268,000). Unemployment remained unchanged at 3.7 percent and job openings continue to outpace the number of available workers to fill them, proving that the labor market remains strong, and companies continue to compete for workers.

Layoffs and Job Quits. Layoffs remain very low, despite the headlines hyping layoffs at large tech firms. Once again, the more telling metric is how long these let-go workers remain unemployed. In November, tech added 19,000 jobs as smaller firms seize their opportunity to acquire this in-demand talent. Meanwhile, job quits have remained at 4 million or above for 17 straight months.

Labor Force Participation. Labor Force Participation Rate (LFPR), which measures the number of people working or actively looking for work, dropped even further in November to 62.1 percent (62.2 percent in October). Prime age participation (workers aged 25–54) has dropped for three consecutive months from 82.8 percent in August to 82.4 in November.

Wages and inflation. Wages accelerated by 5.1 percent in November from a year ago (and up slightly from 4.9 percent on the year in October), which is important for workers fending off inflation, but complicating the Fed's efforts to tame it. With inflation at 7.1 percent, households are feeling the squeeze. Even with a 5.1 percent increase in wages, inflation makes that increase feel like a 1.9 percent loss. To see exactly where inflation is having the greatest impact, check out the Wall Street Journal's interactive inflation tracker.

Trends in Engineering and Sciences

Job openings and unemployment rates in Engineering and Sciences continues to reflect a significant shortage of workers with these skillsets. Between September and November, there were .15 or less unemployed workers in Engineering and Sciences labor categories to fill open positions.

Unemployment in Engineering and Sciences Labor Categories and Industries:

	Overall Unemployment	3.7%
Labor Categories	Software, Hardware- IT, + Mathematics	2.1%
	Architecture + Engineering	1.6%
	Sciences—Life, Physical, Social	1.1%
Industries	Hospitals	1.7%
	Utilities	1.2%
	Professional + Technical Services	2.5%
	Manufacturing	2.9%
	Construction	3.8%

• United Airlines and Boeing just announced big news that will impact both Transportation and Consumer and Industrial Products. Having returned to profitability post pandemic, the airline has just placed an order for 100 Boeing 787 Dreamliners with an option to purchase 100 more. This announcement will have a significant impact on supply chains in both the Automotive and Consumer and Industrial Products industries. It also offers an assurance of long-term guaranteed work, and may offer incentives for other companies to follow suit.
• Automotive added 1,900 jobs in October—a 4.7 percent increase over last year. Over the last three months, postings for Engineering talent by automotive companies have increased 128 percent compared to pre-pandemic activity (September-November 2019).
• Consumer and Industrial Products. Manufacturing added 14,000 jobs in November and equipment/factory orders (CAPEX) are at very elevated levels, creating a strong backlog in 2023 for many C&IP companies.

For a complete rundown of employment trends in Engineering and Sciences, be sure to download the data report.

Connecting the Dots

1. Strengthening Supply Chains with US-based Manufacturing.
   • Semiconductors. Semiconductor chip sales are expected to reach $1 trillion per year in the next decade, and several companies are bringing the manufacturing of these critical components stateside. Taiwan Semiconductor Manufacturing Company recently announced plans to build a second multibillion-dollar semiconductor chip factory in Arizona and welcomed President Joe Biden and Apple's CEO Tim Cook to the location of their first plant, also in Arizona, in December. This first plant, announced in 2020, is expected to begin mass production of the world's most advanced chips beginning 2024. Both Intel and Samsung have also announced plans for US-based chip-making factories.
   • Solar Panels. Preliminary findings from an investigation (first reported in March) that led to the cancelation of solar projects across the US found that four Chinese-based solar panel manufacturers did, in fact, circumvent US tariffs by re-routing their operations. As a result, importers of solar panels and their parts are in a race to find other sources. Enel, an Italian-based solar panel manufacturing company plans to fill that role in the US. Between limited global supply and the internal push for more US-based manufacturing of renewable energy and related technologies, the company will launch a US factory that builds solar panels and manufactures solar cells—a critical component of solar panels never before produced in the US.
2. Rethinking College Degrees. Google, Delta, and IBM are among the latest companies to revise job requirements in a tight talent market. A recent article in the Wall Street Journal reports that these companies are focusing less on degrees and more on skills, experience, and aptitude when considering candidates. This move isn't just limited to the private sector. Earlier this year, Maryland cut degree requirements for several state jobs and Pennsylvania plans to follow suit.
3. The Rise of Independent Workers. Another 64.6 million people joined the independent workforce in 2022. These workers desire flexibility and variety in their employment, but also cite institutional mistrust as a driving force for their change in status. While unpredictable income was cited as a downfall, these workers don't believe corporations have their best interests at heart, so are willing to take the risk.