The US labor market is experiencing a shift as job growth slows, leading to increased unease among Americans. The Federal Reserve Bank of New York’s latest survey revealed that satisfaction with jobs, wages, and benefits decreased in July. Additionally, fewer people were employed, a record number of individuals were seeking jobs, and the expected likelihood of becoming unemployed reached a new high. Despite these concerns, the survey also indicated that Americans still felt there were opportunities available.
Although job offer activity remained steady compared to the previous year, the average expected likelihood of receiving at least one job offer increased. The average reservation wage, the lowest wage individuals would accept for a new job, was higher than in July 2023 and significantly above pre-pandemic levels. While there was a slight decline in the average reservation wage in July, it has increased by 31.4% since March 2020, with most of the gain attributed to inflation. Adjusting for inflation, the increase was a more modest 8.2%.
Despite the recent slowdown in job growth, the US labor market has been establishing a more balanced state in line with a slower-growing economy. The latest job report in July showed a lower-than-expected monthly total of 114,000 jobs and an increase in the unemployment rate to 4.3%. While this data caused market fluctuations, economists suggest that it does not necessarily signal an impending recession or significant deterioration in the labor market, as layoffs remain limited.
Looking ahead, the next jobs report is anticipated on September 6, with data revisions from the Bureau of Labor Statistics expected to provide further insights into job growth trends over the past year. The labor market remains a key focus for policymakers and economists, with ongoing monitoring needed to assess the impact of evolving economic conditions on employment opportunities and job security. Despite concerns about the current state of the labor market, Americans are still hopeful about potential job prospects and opportunities for advancement.
