The labor market is a hot topic. Many people are looking for work, and many are looking to employ. So most people want to at the very least get a feel for what may come. Naturally, this includes the Federal Reserve and the rest of the government. These institutions work hard to create a cohesive picture of what the futures may bring. Unfortunately, it seems that picture is unclear.
The main concern of the Federal Reserve is inflation. They must choose whether to slash, keep, or raise interest rates. One of the ways they make that decision is by paying attention to the labor market. However the data seems contradictory at best. In non-agricultural jobs there is a 272,000 job increase, while in another survey 408,000 jobs were lost. Economists were expecting economic pressure to slow down the economy. Specifically, they expected government jobs to run out as funding to those places was used up. However, they are still growing.
Average wages and total employees are on the rise. Paradoxically, it also seems like unemployment is rising as new jobs are being created. This has led to the Federal Reserve to abstain from raising prices any time soon. However, everyone is expecting a slump eventually. "If you have wage increases running higher than productivity would
warrant, then there will be inflationary pressure,” Jerome H. Powell,
the Fed chair, said about the topic. As these trends continue it could mean the spending power of consumers may fall even as their wages increase due to inflation. As such, no one truly knows what may happen next.
As of now people are expecting there to be a slow down in the economy. Not a recession, but a flattening of current trends. As of now, the Federal Reserve is schedule to meet up again next week and in July as of the writing of this blog. Here there will be discussions about what to do about interest rates. As such we are left with this in mind. The job market is good for the worker, though it has become progressively more inaccessible as older employees keep their jobs and employers do not provide openings or seek to replace their senior staff, making it harder for people in their early 20s to enter the workforce. So we suggest to prepare and take advantage of whatever opportunities you are able to get a hold off and prepare for whatever may come next.
Works Cited
https://www.nytimes.com/2024/06/07/business/economy/wage-growth-exceeds-forecasts-potentially-deterring-fed-rate-cuts.html
https://www.nytimes.com/2024/06/07/business/economy/jobs-report-may-2024.html
https://www.nytimes.com/2024/06/07/business/economy/what-to-make-of-the-jobs-reports-mixed-signals.html
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