In a recent report by The Epoch Times, the state of the U.S. job market was analyzed as the Federal Reserve shifted its focus from inflation control to employment stabilization.
Federal Reserve Chairman Jerome Powell indicated a shift in the central bank’s priorities. During his speech at the Jackson Hole Economic Symposium, Powell stated, “We do not seek or welcome further cooling in labor market conditions.”
Cooling Labor Market
The U.S. job market, which had been running hot since the post-COVID-19 recovery, appears to be cooling down.
So far in 2024, approximately 1.9 million new jobs have been created, a slight uptick from the 1.4 million jobs added in 2023.
However, the unemployment rate has risen to 4.3 percent, compared with 3.5 percent last year, reflecting a significant loosening of the labor market.
The number of job openings has also seen a decline, dropping by about 1.1 million since September 2023, bringing the total to just over 8 million. This contraction suggests that businesses are increasingly cautious, with many freezing hiring plans until economic conditions become clearer.
According to a Challenger, Gray & Christmas report, hiring is at its lowest year-to-date level since 2012.
“The job market is indeed cooling, with hiring at the lowest point in over a decade,” stated Challenger, Gray & Christmas, Inc. Senior Vice President Andrew Challenger.
Employer and Worker Concerns
The hesitancy in the job market is mirrored in the actions of both employers and workers.
Many businesses are holding off on filling positions, with some citing the need to reassess their staffing plans after the upcoming elections.
Troy Miller, president and CEO of National Religious Broadcasters, shared that his organization has frozen hiring plans until the fourth quarter.
Workers, too, are feeling the pressure. The number of people quitting their jobs has dropped by about 300,000, reaching its lowest level since November 2020.
A recent survey by the New York Federal Reserve found that nearly 15 percent of individuals expect to lose their jobs in the next 12 months, up from 12 percent in September 2023.
The same survey revealed that fewer people expect to find new employment quickly if they were to lose their jobs today.
The Rise of Multiple Job Holders
Amid these economic difficulties, the number of Americans working two or more jobs has steadily increased, nearing an all-time high of approximately 8.5 million people.
These workers, representing about 5.3 percent of the workforce, are seeking additional income through part-time jobs, contract positions, or gig work to offset the rising cost of living.
One such individual, Keith, a tech professional who has been with his current employer for over three years, routinely searches for part-time work to supplement his income. “I try to keep my options open. I have a wife and four kids that I have to think about,” Keith told The Epoch Times.
Inflation and Wage Pressures
While inflation has stabilized, with the consumer price index (CPI) falling below 3 percent for the first time since March 2021, prices continue to rise in many areas.
Food costs, in particular, have surged, with ground beef prices increasing by 1.3 percent, a dozen eggs by 5.5 percent, and milk by 1.9 percent in July alone.
Since January 2021, the CPI has increased by over 20 percent, while real hourly compensation has fallen by more than 4 percent, highlighting the ongoing squeeze on American households.
The Fed’s Next Steps
Powell’s speech at Jackson Hole revealed a shift toward stabilizing employment after two years of aggressive rate hikes aimed at controlling inflation. Despite these measures, the labor market has not collapsed, and unemployment remains manageable.
Economic forecasts suggest a slight increase in unemployment in the coming years, with predictions ranging from 4.2 percent to 4.5 percent by 2026.
Employers are also expected to adjust wages, with an average increase of 3.5 percent anticipated in 2025, slightly below the pre-pandemic baseline.
The big question remains: Will the Fed’s expected rate cuts be enough to prevent further job losses, or is the U.S. job market facing a prolonged period of uncertainty?
Powell and his colleagues on the Federal Open Market Committee appear to believe that the labor market has cooled sufficiently.