Cooling Economy Is Giving US Workers a Lift
Easing inflation and mended supply chains are translating into more buying power for Americans despite a softer labor market.
Finally some relief for consumers.
Photographer: David Paul Morris/Bloomberg
The red-hot labor market is cooling. Monthly US job growth has slowed to around 270,000 from more than 500,000 at the start of the year. Employers are staffing up, returning average work weeks to pre-pandemic levels. Labor-market churn has subsided, with the rate at which workers are quitting their jobs falling back to early 2021 levels. Hiring rates have fallen, too.
And yet despite all this, the fortunes of US workers have arguably improved more over the past few months than they have all year. Gradual normalization from pandemic and supply-chain disruptions are benefiting both employers and workers. Think of it as a one-off productivity dividend as the economy becomes more efficient. This time last year we saw strong nominal growth while inflation-adjusted growth was poor; Now things are moving in the opposite direction.