Despite a mild recession and uncertainty about future growth, industries and regions heavily dependent on information technology have recently had a high demand for workers and unemployment remains extremely low.
The post-pandemic recession of 2022 is unique in a lot of ways. The pandemic of 2020 caused impacted supply chain needs, housing demand, and job expectations in unanticipated ways. It will be years before experts fully understand these two pivotal years’ impact on the US economy. Still, the result in 2022 is a recession beginning with a bear market in January of 2022, and the recession officially began Summer of 2022.
This recession is following standard expectations in several ways. There is associated inflation, but unemployment has not accompanied this recession though they usually are correlated.
One expected aspect precursor to this recession is inflation, and late 2022, it’s the highest it’s been in 40 years. There are several reasons for this inflation:
Embargos on Russian oil due to the war in Ukraine caused an initial rise in gas prices in the US. When shipping costs go up, all other expenses also result in inflation.
When the Fed lowered interest rates in 2020-2021, many people used the opportunity to buy houses with affordable mortgages. People also migrated out of cities as WFH options became more normalized during lockdowns.
With a massive demand for housing, and limited supply, the cost of living went up for homeowners and renters across the country. Housing expenses are 15% of the US economy, and rising pricing in that sector has significantly impacted inflation.
During lockdowns, people’s spending decreased, and companies with limited staff reduced production to accommodate this change. As spending returned to normal in the following years, companies struggled to keep up. The limited supply on this front also contributed to the 2022 inflation.
Typically recession and growing unemployment go hand in hand. The current economic status is not following that norm, unemployment has been steadily dropping, and companies cannot hire quickly enough.
Unemployment is even lower in the tech sector, and experts are reporting record lows in this area as demand for skilled technology workers increases. This area has already had a talent shortage, and the recession is not counteracting the phenomenon.
TalentAmp Recruitment Sales Director, Charles McCarthy states,
“We are watching the market. There are reports of a possible slowdown, but we do not see that with our clients. Tech talent is in huge demand, and unemployment in IT is less than 1%.”
Though past recessions are marked by inflation and extensive unemployment, the 2022 recession is not following the norm. Unemployment is low overall and especially low in jobs involving IT. In the following years, we will see how businesses around the country react to these phenomena. In the meantime, companies are working double-time to hire the tech talent they need to keep their businesses running.
Contact our team at Talent Amp if you’re struggling to hire tech talent in your sector. Our team has an extensive network of IT professionals in various specialties. In-house recruiters struggle to keep up with the current economic landscape, so contact us today to ensure IT hiring success.