The unemployment rate is at a record low
The unemployment rate, currently at 3.5%, now matches the 50-year low last seen in February 2020 before the pandemic hit. Nonfarm payroll additions averaged 471,000 per month over the January through July period. And in July alone, there was a whopping 528,00 job gains. These are astounding figures in any economy, but especially as the labor market is at full employment. Businesses know that this means the labor market is tight and it will still be difficult to find and keep workers.
Wages are still rising
Moreover, wages are rising for many workers. Average hourly earnings are up 5.2% from a year ago, with the greatest gains among leisure and hospitality, education and health care services, and professional services. Additionally, wages and salaries for civilian workers increased 5.3% over the year ending in June. These data are another signal to companies that the labor market is still tight. Labor shortages are likely here to stay Labor shortages remain and likely will persist even if the US goes into a brief and potentially mild recession. Even as business
For one thing, the growth in the 미수다알바 working-age population (ages 25 to 54) is slower than the growth in those who are retirement age, according to the Congressional Budget Office. Also, many people who retired early during the pandemic are unlikely to return, as evidenced by the continued weakness in labor force participation rates among workers 55 and over. Further, there were an estimated 888,000 fewer immigrants in 2021 compared to 2016, due in part to stricter immigration laws enacted even before the pandemic began, according to United Nations net migration data.
Moreover, many people are still unwilling or unable to work due to lingering pandemic effects. Some still fear infection or have “long-covid” symptoms that are impairing their ability to work. Others still have childcare and adult care challenges. And many workers are still quitting to find better jobs and opportunities. Indeed, fewer people are willing to work two or more jobs given rising wages, especially for job-switchers.
The Conference Board anticipates that the US will experience a recession this year that may extend into next year, but that it may be far less intense than the downturns during the worst of the pandemic and the Great Recession. This recession will likely be induced by the Fed raising interest rates above 3% this year, which will make borrowing more expensive and promote a downshift in domestic demand that will help cool inflation.
Typically, slower domestic demand means businesses cut back on hiring plans first, and then lay off workers. This time, firms will likely rescind job ads and cut unnecessary costs, while trying to hold on to many of their best workers that they struggled to attract and retain over the last two years.
