Total jobs in the US increased 1.7% over the last year, the lowest YoY growth rate since March 2021. Labor market continues to loosen, slowly moving back to normal.https://t.co/l5IYmkeySJ pic.twitter.com/HheZ7ijDif
— Charlie Bilello (@charliebilello) July 5, 2024
U.S. job openings rose slightly to 8.1 million in May despite efforts to cool the labor market through higher interest rates. Vacancies increased from a revised 7.9 million in April, which marked the first reading below 8 million since February 2021, the Labor Department reported Tuesday. April openings were revised down from an originally reported 8.1 million.
Layoffs increased to 1.65 million in May from 1.54 million in April. The number of Americans quitting their jobs — a sign of confidence in their prospects — remained essentially unchanged.
The US Unemployment Rate moved up to 4.1% in June, the highest level since November 2021.https://t.co/A9CGh417SX pic.twitter.com/fvnQ99xBPb
— Charlie Bilello (@charliebilello) July 5, 2024
“The report was another sign that the labor market is holding firm … The expansion looks solid,” said Robert Frick, an economist at Navy Federal Credit Union.
Global News | Latest data from the US on unemployment rate, average hourly earnings and nonfarm payrolls👇#UnitedStates pic.twitter.com/YuY81sqMj0
— ET NOW (@ETNOWlive) July 5, 2024
The job market has been remarkably resilient despite the Federal Reserve’s aggressive campaign to raise interest rates in order to control inflation. The Fed hiked its benchmark rate 11 times in 2022 and 2023, lifting it to a 23-year high. While there were predictions of a recession, the economy continued to grow and employers continued to hire.
Job market shows slight resilience
However, there have been signs that the economy is losing some momentum. Job openings have steadily declined since peaking at 12.2 million in March 2022.
The labor market is cooling off. The Fed needs to acknowledge this more.
Unemployment rate: 4.1% –> highest since Nov 2021
Total unemployed = 6.8 million (vs 6million a year ago)
Long-term unemployed = 1.5 million (vs 1.1m a year ago)Only 136,000 private sector jobs added in… pic.twitter.com/aSYxedjrfP
— Heather Long (@byHeatherLong) July 5, 2024
The job market is still considered strong, with 1.25 jobs available for every unemployed American, though this is down from a ratio of 2-to-1 in January 2023. U.S. employers added a solid 206,000 jobs in June, indicating ongoing economic strength. The Labor Department is expected to report on Friday that employers added 190,000 jobs last month, down from 272,000 in May, according to a survey of forecasters by the data firm FactSet.
Unemployment is forecast to remain low at 4%. High interest rates have been effective in lowering inflation towards the Fed’s target of 2% a year, down from a four-decade high of 9.1% in June 2022. Progress in containing price increases is expected to allow the central bank to start cutting rates, with Wall Street investors anticipating the first rate cut at the Fed’s September meeting.
Speaking at a conference in Portugal on Tuesday, Fed Chair Jerome Powell stated that while there has been progress in reducing inflation, more evidence is needed before the Fed can consider cutting rates.
