The Job Market Slowdown Is Getting Hard to Ignore
The payrolls data still looks fine, but under the hood are signs of deterioration for the growing number of people who are unemployed or keen to switch jobs.
What’s next?
Photographer: Allison Joyce/Bloomberg via Getty Images
It’s easy to look at the rise in the unemployment rate over the past six months and attribute it to a growing labor force, as Goldman Sachs Group Inc. argued over the weekend, or a normal rebalancing of the economy that will help control inflation, as I suggested last week was one possibility. Neither argument captures the nuance of labor market changes this year, and how workers should be thinking about their job prospects going forward.
While the odds of getting laid off remain very low, for the small — but growing — percentage of people who are either unemployed or looking to change jobs, conditions are arguably worse now than they’ve been in more than five years, outside of the pandemic. It’s important not to gloss over this reality because a number of signs point to a continuing deterioration so long as the Federal Reserve keeps interest rates at a level that restrains the economy.