ZipRecruiter ended up being a pretty good gauge of the slowing we’ve seen in job openings this year. If you remember back in January they warned about the slowing in listings they were seeing. In a delayed fashion in its reporting, we’ve seen US Job Openings from the BLS fall from 11.2mm in December 2022 to 9.59mm in March 2023. We’ve also seen 5 out of the last 6 months declines in temp jobs in the monthly payroll data. So what did Zip say last night in its Q1 shareholder letter and earnings call?
In their Q1 quarterly shareholder letter CEO Ian Siegel said “The macroeconomic environment is highly uncertain. Our prior guidance assumed that softness in demand observed in January created a lower starting point from which a more normal seasonal pattern would reassert itself. Contrary to that assumption, in Q2 ’23, we have seen demand for recruiting services continue to decline. Job postings have decreased across the majority of industries and across companies of all sizes. Both SMBs (small and medium sized businesses) and enterprises are spending less to make hires in spite of heading into what is historically the hiring season. This means we are no longer following the standard seasonal job market pattern ZipRecruiter has tracked over the company’s 13 yr history, excluding the Covid pandemic period.”
In the earnings call, “On conversations with our customers, we see employers paring back their hiring in response to the uncertain economic backdrop we now face. Because of these trends which are unlike anything we’ve seen in our 13 years of doing business, we are not providing full year revenue guidance.”
And to harp on my continued point that I’ve heard many companies talk about particular softness in April, post SVB’s failure, ZIP said this, “While Q1 ’23 revenue was down 19% y/o/y, revenue in April was down 27% y/o/y. This is reflective of a contraction in demand with both SMBs and enterprises continuing to reduce the number of jobs they post and the amount they spent for job advertising.” To this point, Siegel said “there has been an acceleration of the deceleration in the demand for recruiting services.”
I’ll finish with these comments from Siegel, “This is very clearly a macroeconomic phenomenon. This downturn is affecting a multitude of players in our industry. And just last week we had an enterprise summit where I spoke to 30 of the largest hires in America. These are companies that hire between thousands and 10s of thousands of employees per year. Across the board, all of them have reduced their hiring plans in the face of the economic uncertainty their businesses face.”
Vegas continues to still be hot. The CEO of WYNN in their earnings call said “Despite the confluence of high inflation, high interest rates, bank failures, and increasingly difficult y/o/y comps, Wynn Las Vegas delivered an all time record in Q1…We also subsequently delivered the best April in the history of the property.” In Macau, amazingly on the non gaming side, “our retail business was incredibly strong, with tenant retail sales increasing 60% compared to Q1 of 2019.” Golden Week “was particularly strong, outperforming Golden Week 2019 in several key areas.” I remain positive on the Chinese consumer and the beneficiaries of their spending.
Mortgage apps bounced by 6.3% w/o/w with little change in the average 30 yr mortgage rate of 6.48%. Purchases were up 4.8% w/o/w after falling by 2% last week. They remain down 32% y/o/y. Refi’s (now could be cash out refi’s) jumped 10% w/o/w though are lower by 32% y/o/y. We know the pace of overall housing transactions is muted both because of the lack of inventory of existing homes and also price. Home builders are trying to fill the void with new product but that only works in certain markets where there is plenty of land to build on.