The labor market will remain hot, even with an economic slowdown

  • Paul Knopp is Chief Operating Officer of accounting firm KPMG in the United States.
  • He spoke to Insider at the World Economic Forum gathering in Davos, Switzerland.
  • He told Insider that the job market would likely remain “hot” even with an economic downturn.

Even with an increased risk of an impending recession, a senior executive says the job market will remain hot.

“Generally speaking, the really hot labor market is something that’s going to persist for at least 3-5 years,” Paul Knopp, CEO of KPMG’s U.S. operations, told Insider on Monday.

“We need more people in manufacturing, we need more people in tech, we need more people in health care,” Knopp added, saying that as enrollment declines in universities and the US population ages, the future labor supply may not be sufficient. .

Knopp spoke to Insider at the annual gathering of the World Economic Forum (WEF) in Davos, Switzerland, where world leaders and businesspeople typically gather each year to “build communities and conflict resolution initiatives. problems,” according to the WEF website.

Manufacturing is indeed experiencing a labor shortage that could only get worse, as is health care, according to recent research. The United States added more jobs than expected in April (428,000 in non-farm industries). And job openings hit a record high in March, with 1.9 jobs open per unemployed person, according to the New York Times.

But the

Federal Reserve

The decision to raise interest rates, a stock market crash and headwinds like inflation and fuel prices painted a bleaker picture, stoking fears of a downturn.

Bank of America said Friday there was a 1 in 3 chance of a recession next year, but it would be “milder” than previous ones. Companies such as Wells Fargo in Carvana are also making layoffs.

Knopp said he thinks whether or not a


will happen depends on the ability of the Federal Reserve to execute its desired “soft landing,” where inflation can fall without significantly hurting employment levels.

Right now, it’s unclear if the Fed will be able to pull that off, Knopp said, adding he can understand why some might say a downturn has already started, “because there’s so many people in this country who are so dramatically affected by food and fuel costs.”

Companies like Walmart and Target cited them as headwinds in their disappointing quarterly results last week.

“But in terms of the traditional definition of a recession, we hope we can avoid one,” Knopp said.

Knopp also touched on the topic of hybrid working in his interview with Insider, which was fitting given that he took the helm at KPMG US in the age of remote working.

He told Insider on Monday that the flexibility of working from home is positive, but meeting people in person is also good.

“We just have to calibrate the right amount of in-person experience with remote work,” he said. “So what is the workplace now, it’s not permanently virtual, but it’s changed forever.”

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