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U.S. employers see signs of cooling job market By Reuters

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U.S. employers see signs of cooling job market By Reuters


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© Reuters. FILE PHOTO: A job seeker leaves a job fair for an airport-related job at Logan International Airport in Boston, Massachusetts, U.S., December 7, 2021.REUTERS/Brian Snyder

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Timothy Apple and Lisa Beltrin

(Reuters) – People have been walking into Paul Centenary’s cardboard box factory outside Baltimore looking for work, something he hasn’t seen in more than a year.

“We didn’t see that a month ago,” said Centenari, CEO of Atlas (NYSE:) Container Corp. Just six months ago, he said, Atlas turned to a social services organization that placed ex-offenders into jobs to help fill positions.

“The workforce is still tight, but it’s loosening up a bit,” he said.

How much it might come loose is still unclear. Data from the U.S. Labor Department on Thursday showed jobless claims remained near their lowest levels in decades.

The U.S. job market strengthened in the first half of the month, according to a report from payroll provider UKG — even as the Federal Reserve raised interest rates and some economists began to warn of a possible recession.

But other signs point to a slowing economy, including high-profile layoff announcements in industries such as tech and housing.

This week, Tesla (Nasdaq: ) laid off 200 employees working on its self-driving assistance systems. Earlier, CEO Elon Musk told managers that the electric car maker needed to cut about 10% of its workforce. JPMorgan Chase & Co. (NYSE: ) began laying off jobs at its mortgage business.

The unsolicited job seekers offer a glimmer of hope for Atlas Container and other U.S. employers that have struggled to fill jobs and retain employees over the past two years.

“We’ve been hiring because we’re always laying off people,” Centenari said, noting that the lack of air conditioning at the factory makes summer hiring particularly difficult.

“Our place can get hot in the summer,” he said, which is why he was surprised when his hiring manager told him that someone had broken in recently.

FedEx (NYSE: ) CEO Raj Subramaniam said last week that he believes the company’s worst labor problems are in the rearview mirror. Wage hikes, employee turnover and costs related to rescheduling packages around understaffed facilities cost the global delivery company $1.4 billion in the fiscal year ended May 31.

“While wages are still higher than this time last year, they are stabilizing,” Subramaniam said on an earnings call with analysts.

Subramaniam said the company is now focused on retaining employees and using technology to manage the workforce more efficiently.

During the COVID-19 pandemic, employee shortages have become a hallmark of the U.S. job market, with many workers quitting or changing jobs in what has been called the “big resignation.” Federal Reserve Chairman Jerome Powell recently told lawmakers that the current U.S. job market, with “nearly two open positions for every unemployed person,” is “a bit unsustainable.”

Jason Andringa, CEO of Vermeer Corp., a Pella, Iowa-based machinery maker, said he expects the job market to ease in the coming months. He said the Fed’s sharp rate hikes have cooled demand for part of his business tied to the housing and consumer markets: brush cutters sold to homeowners and their landscaping service providers. Vermeer’s other sectors remain strong.

“It definitely doesn’t feel like the labor market is as frothy as it was a few weeks ago,” he said.

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