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the latest labor market data reading adding to concerns about weakness in the economy here. Investors now looking ahead to Friday's jobs report to really solidify some of their rate cut calls going into that. Here, to weigh in, we've got Daniel Joe, who is the Glassdoor lead economist and senior manager of data science. Great to have you here with us this morning, Daniel. Always a pleasure to get some of your insights. So, first and foremost, as you're thinking about what this data reading, especially on the ADP private payrolls number, 99,000 jobs added in August, but that is something that we haven't seen at least in the low point since 2001, it sounds like the early 2000s. So, I mean, what do you make of this and how the Fed is going to be reading through these employment situation data fronts that we're getting this week?

Well, I think it's important to look at the labor market data holistically. And even though we've seen some ups and downs in the data, especially with Jolts coming in, actually rebounding a little bit, but overall, I think the trend is still one of a cooling labor market, one that is softening and even weakening. Um and the fact that we we have some data points that are even a little bit weaker than that, uh just goes to show that the margin of error is very slim for the Federal Reserve as they try to get us towards that soft landing.

And what are you seeing in the data at Glassdoor to indicate whether or not this is a slowing or slow economy with regards to the labor market? Because it seems like it's just on a knife's edge right now between something that is concerning or something that is a welcome sign of cooling.

Well, what we do see is that overall the labor market is cooling. And the question really is is have we gone too far, right? And at least from the employee perspective, uh we see that employee sentiment is still extremely weak. In fact, when we look at the Glassdoor employee confidence index, for example, it's a little bit higher than it was to start the year, but it's still well below where it was before the pandemic. Less than half of employees actually have a positive business outlook for their employers. Uh and that's really negative territory. And on top of that, we've just seen that over the last four years employees have had to jump from crisis to crisis. So, for example, we see that burnout is basically at uh high its highest levels in our data uh that we've ever seen. And so really, I think that goes to show that at least from the employee perspective, from the people who are uh boots on the ground at these businesses, uh they are really feeling stressed right now.

And Daniel, just to correct myself, I mean, I I said 2001. I I don't know what songs I was listening to before the show. It was definitely 2021 that this is the worst reading since. So, all that considered and correction adjusted here, when you think about the overall jobs environment right now and where there is strength and where there is weakness, I mean, we're starting to already get some of that we started to get some of that earlier this week with the ISM manufacturing, that showing construction. That directly correlated into what we saw in terms of the loss of manufacturing jobs in this most recent ADP report by about 8,000 in that sector. Where are other sectors where you would be anticipating weakness at this juncture given what we're already seeing show up in other either inflationary reads or manufacturing reads?

Yeah, I think it's interesting because going back to the Jolts report, if you look at the hires rate, for example, professional and business services, which includes consulting and some tech uh companies, as well as some other services, uh that the hiring rate in that sector is actually basically where it was during the 2008 recession, which is really a startling figure when I saw it, um during the Jolts report release. Uh but it really just goes to highlight that hiring is very slow in the economy right now. Uh economy wide, it's more comparable with what we saw in the mid 2010s. And that really also highlights why employees and workers are feeling so stressed out right now. It's not necessarily that layoffs are extremely high by historical standards, but it's very difficult for folks who have been laid off to to break back in. And it's also uh feeling like folks have gotten stuck for the people who are in a job. They aren't really seeing those opportunities for advancement either internally or externally.

It sounds to me, Daniel, like you're saying the vibes are just not so great out there in the labor market. Are they so bad that the Fed could potentially cut by 50 basis points come September? What are you looking at to determine whether it's going to be 25 or 50?

Well, we do want to see what the jobs report shows us uh tomorrow, and I do expect that we will see a little bit of a rebound from what we got in the latest print. Um but at the same time, the overall trend is still towards weakening. Of course, if we do see a much uh more dramatic worsening in the labor market in tomorrow's report, then I think that does put 50 on the table, but I think the base case uh is for 25, assuming that we get a little bit of a rebound in in tomorrow's report.

Are you seeing any differing in terms of what you were talking about in in the rate of burnout, how is that differentiated across generations or even role types from what you're seeing in the data?

It's a great question, and it really varies from person to person, industry to industry, job to job, right? So, for example, uh the way that people talk about burnout now is very different than what it was in 2021 and 2022. Earlier on earlier on in the pandemic, it was all about how short-staffed companies were. People were trying to get so much done because demand was much higher than expected. Now, it's more about people who feel like uh their leaders have made the wrong decisions. Like their leaders have laid off workers, they feel short-staffed as a result, they feel like they're doing the jobs of multiple people, um when uh when that's a a prioritization decision that's coming from their managers and their leaders. Uh it it does vary between generation, of course, um but really, I think actually what we see is that middle managers feel really stressed right now because they're getting pushed from both ends, right? They're getting the pressure from their leaders to get more done with less, and they also are feeling the pressure upwards from their teams uh in order to justify some of these leadership decisions.

Daniel Joe, Glassdoor lead economist and senior manager of data science. Daniel, always a pleasure to get some of your insights. Thanks for jumping on with us this morning. Appreciate it.

Thanks.