Last Updated on 06/09/2024 by Arun jain
The labor market seems to be straining the water, with employers wanting to just keep ahead of the supply of job seekers.
That’s the picture that emerged from the August jobs report, released Friday, which provided evidence that while softer than in years, the employment landscape remains healthy, wages are still rising and Americans are still eager to work. is
“This report doesn’t signal that we’re taking another step into a recession, but we’re still seeing more signs of cooling,” said Sam Kuhn, an economist at recruiting software company Epcast. “We are trending more closely to the 2019 labor market than the labor market in 2010 or 2011.”
Employers added 142,000 positions last month, The Department of Labor reported. That was somewhat lower than forecast, bringing the three-month average to 116,000 jobs after a sharp improvement over the previous two summer months. In the year before June, the monthly average was 220,000, although that number is expected to fall when Annual revisions are due next year.
The jobless rate fell to 4.2 percent, easing concerns that it was on a steep upward trajectory after July’s 4.3 percent jump, which appears to have been driven by weather-related temporary layoffs.
In other signs of stability, the average workweek ticked up to 34.3 hours and wages rose 0.4 percent in the month, slightly more than economists expected but not enough to add significant fuel to inflation.
The data is unlikely to send a clear signal to the Federal Reserve It weighs how quickly to start easing interest rates Later this month. Investors currently expect a quarter-point cut, but it could be larger if Fed officials determine the labor market is deteriorating rapidly.
Stocks and bond yields fell throughout the day, as investors digested the mixed report.
Other indicators remain strong. economy has grown at an annual rate of 3 percent In the second quarter when adjusted for inflation, acceleration from the first quarter. Some measures of economic confidence, viz University of Michigan Consumer Sentiment Indexare recovering from deep turmoil in the last few years. A disproportionate number of jobs Relatively high-wage industries have been added since the pandemicThe Federal Reserve Bank of Cleveland reported.
The strength of the labor market has led to large numbers of people starting to look for work, particularly women aged 25 to 54, who have reached their highest level of labor force participation on record at 78.4 percent. That comes in spite of Tight market for childcareWhere there is employment Sinking since May.
Employers have not started shedding workers in large numbers; Preliminary claims Unemployment insurance has trended downward in recent months and Layoff rate remains lower than normal. This Number of people working part time because they cannot find more hoursWhile growing, remains within historical norms.
But businesses aren’t posting many positions, and workers are loathe to leave for new opportunities. This Job opening rate After rising to a record level in 2022, it’s back to where it was before the pandemic, and there are almost as many vacancies as there are people looking for work.
“It looks like this is more stable on the hiring side, but companies aren’t necessarily laying off workers yet,” said Thomas Ryan, an economist at Capital Economics. “The dynamics of a typical recession, where a few people get laid off and it moves on, doesn’t seem to be the case.”
That’s good for people who already have jobs, but it’s a tough situation for those just out of high school or college. Trying to find out for the first time.
One of those arrested is Justin Burgess, 44, who works at a pizza place in Seattle. The pandemic kept him out of work for a few months, but federal relief payments gave him enough money to invest in the stock market for the first time and pay off credit card debt.
Getting by has become difficult now, as the rent on the house he shares with friends has gone up, and he’s exhausted that small savings cushion. Even though Seattle’s minimum wage has risen — it’s now $17.25 an hour for small businesses with tipped workers like Mr. Burgess’s — he doesn’t think he’s seeing much of a gain.
“People are starting to resent the whole tip system, so we’re making less money in tips, and I’m still living to find out,” Mr. Burgess said. Recently, his management notified staff that 2.5 percent would be deducted from tips to cover credit card swipe fees.
Food service and drinking establishments, such as where Mr. Burgess works, added about 30,000 jobs in August, but the industry has barely surpassed its pre-pandemic levels after a slow recovery.
The only other sectors adding significant numbers of jobs were other categories of health and care, which gained 44,000 jobs, and construction, which gained 34,000 jobs – the second month of surprisingly strong growth in two years in a cycle of elevated interest rates. Financing for new projects more difficult.
Support for that construction came from federal aid packages for airports, transportation infrastructure and clean energy installations. Rebecca Fountain, who walks A construction firm In Las Vegas, some of them are winning government bids. The scale of the new opportunities is confusing to Ms. Fountain and her industry peers.
“We’re seeing some sort of slowdown coming, and yet we’re getting all kinds of work now,” she said. “We’re not sure what to think other than ‘get the contract and start building as soon as possible so they can’t cancel it’.”
Like many Las Vegas employers, Ms. Fountain uses local union-supplied workers, which means she does not have to recruit and pays a flat hourly rate. But the hiring hole has been stretched thin in recent months, she said, and sometimes sends people with less experience than she would like.
Square with k Surveys collected by The Associated General Contractors, a trade group, found that its union-shop members are now having just as difficult a time filling roles as their non-union members — especially for positions requiring higher skills.
A wave of immigrants arriving at the southern border in recent years could help satisfy the hunger of workers, as most of them receive employment authorization within six months. Adam Cummins, senior director with Moody’s Analytics, notes that migrants have found their way to large cities and agricultural areas such as California’s Central Valley, allowing production to continue when it would otherwise grind to a halt.
“I think they’re generally ending up in places where the need for workers is more pronounced,” Mr. Cummins said. “This influx of new workers into the economy has allowed us to bring inflation under control, but do so in a way that is not as painful as it might otherwise be.”
A notable weak spot is manufacturing, which has been largely flat since late 2022 and contracted 24,000 jobs in August. Outside of federally subsidized investments in battery and semiconductor plants that generally haven’t started operations, high interest rates have weighed on new investment, while a strong dollar has dampened exports.
Timothy Fiore, chairman of the Institute for Supply Management’s manufacturing business committee, said companies are reluctant to make big decisions in the upcoming election, given the potential for major policy changes if the White House or Congress change hands.
“We have a very depleted order book, and in the absence of new orders coming in, we have companies abandoning their production plans,” Mr. Fiore said.
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