The US Economy is Stabilizing but the Job Market is Still Booming
Source：CNN
From：Taiwan Trade Center, Chicago
Update Time：2022/10/18
09.27.2022 The Economy is Stabilizing But the Job Market is Still Booming-
The US economy, measured by the GDP shrank in the first half of the year. There was high inflation, war overseas, a fall in consumer sentiment and huge companies have had to layoff thousands of workers. Despite all of this, America’s labor market is still booming. The US announced 20,485 layoffs in August which is the lowest year-to-date total since 1993. The Labor Department number disclosed that the number of initial jobless claims has also dropped to their lowest level in 2 months. Furthermore, in July, 528,000 jobs were added and available jobs surged to 11.2 million. With the hot job market, this poses concern for the Federal Reserve, because jobs will have an increase in wages leading to higher prices and keep inflation high.
Huge layoffs have been common recently, but most of them are from technology and tech-adjacent companies. The technology sector had a huge demand during the pandemic, but now that things are returning back to normal, they have to scale back down as well. Other industries such as the service industry are seeing more demand as people are eating out and going on vacations. However, the job market is still strong for people that are laid off. Data from the BLS shows that less than one in three unemployed workers has been jobless for 15 weeks or more. There is also a two to one ratio of jobs to people looking.
Economists have many assumptions as to why there is a labor shortage. The size of the labor force has decreased from 67% in the early 2000s to just above 62% in July. Some assumptions for the labor shortage include: lack of child care, health-related concerns, immigration policies and early retirement. There is also the possibility of discouraged or marginally attached workers or those suffering from chronic effects of Covid-19. According to a McKinsey report, younger employees want workplace flexibility, meaningful work and compensation. Dowling, a co-author of the McKinsey report stated, “We have to fundamentally rethink how we’re working”.
Source: https://www.cnn.com/2022/09/01/economy/us-jobs-report-august-preview/index.html