Michelle ThompsonThe US labor market is shifting, with job growth decelerating, and new survey data suggests growing unease among Americans. The Federal Reserve Bank of New York’s latest survey revealed declines in satisfaction with jobs, wages, and benefits in July. Employment numbers fell, a record number of people were job hunting, and the anticipated likelihood of unemployment reached a survey high of 4.4%.
Despite concerns, the survey also indicated that job opportunities remain abundant. Job offer activity was steady, with an increase in the likelihood of receiving offers compared to the previous year. The average reservation wage in July was $81,147, slightly down from the March peak but still well above pre-pandemic levels.
Since March 2020, the reservation wage has risen by 31.4%, largely due to inflation. Adjusted for inflation, the increase was a more modest 8.2%. While the real reservation wage has been stable since 2021, its trajectory has improved compared to the pre-pandemic decline.
Recent job growth has been sluggish, with July’s job numbers significantly lower than expected at 114,000, and the unemployment rate climbing to 4.3%. Although this data caused market concern, economists warned it doesn’t necessarily predict a recession or a severe labor market downturn, noting that layoffs remain low. Upcoming reports may provide further clarity on the true pace of job growth.
