In search of work? Join the club.
The share of U.S. employees who’re on the job hunt has reached the very best level in over a decade, in keeping with the Federal Reserve Bank of Recent York. Recent labor market data released Monday show that over 28% of respondents said they were actively in search of a job in July. That is the very best reading because the query was first asked in March 2014, when slightly below 32% said the identical.
Economists say more people in search of work tends to be positive overall. But that is not at all times true for the employees themselves.
“It will depend on if that person is employed or unemployed,” said Sofia Baig, an economist at Morning Seek the advice of, through the firm’s State of the Economy briefing last week. “It’s not a great thing when there are people who find themselves unemployed and might’t discover a job.”
The unusually high job-search reading comes after a surprise uptick within the unemployment rate to 4.3% in July. Rising unemployment sparked a major market sell-off earlier this month and spurred some notable economists to call for an emergency rate cut from the Federal Reserve.
The Fed has been holding benchmark rates of interest at a two-decade high in its war against inflation. Higher rates of interest can cool an overheated economy by making it costlier to borrow money. When it’s costlier to borrow money, people often spend less. In consequence, employers may eventually hire less — and even cut their workforce.
But layoffs aren’t the one reason individuals are itching to seek out a job. The NY Fed’s data show that in comparison with last July, employees are increasingly dissatisfied with their pay, advantages and prospects for a promotion. That’s causing a lot of them to search for a greater gig.
In reality, employees are less satisfied with advantages and promotion opportunities than they were at the peak of the pandemic-era Great Resignation, when droves of fed-up Americans quit their jobs. The important thing difference is that the labor market has notably cooled since then, meaning employers aren’t as more likely to hire individuals who just jumped ship.
Do recent layoffs signal a recession?
Headlines this summer have been dominated by big-ticket layoffs across several industries.
In July alone, Disney, Intuit, John Deere, the dating-app company Match and the media company NerdWallet all announced layoffs, affecting nearly 3,000 employees total. More cuts got here in August, with Axios, General Motors, Intel, Paramount and carmaker Stellantis collectively slashing about 7,500 jobs.
Adding fuel to the panic, the recent uptick within the unemployment rate triggered what’s referred to as the “Sahm Rule,” a signal that the economy is headed for a recession. Created by the economist Claudia Sahm, the unofficial rule of thumb says that when the three-month average unemployment rate rises by not less than 0.5% from the bottom point prior to now 12 months, we’re in a recession. This rule has been accurate for each recession since 1970.
Nevertheless, the official diagnosis of a recession is made by a committee of economists on the National Bureau of Economic Research. This committee takes its time in officially declaring a recession. Often, the announcement comes after the very fact, because it waits “until it’s confident that a recession has occurred.” In keeping with NBER, essentially the most recent recession was a temporary one on the onset of the pandemic in 2020.
Some experts, nevertheless, are tempering the news of recent job cuts by pointing to the relative health of the job market and economy overall. They include Sahm herself.
“The U.S. is just not in a recession, despite the indicator bearing my name,” Sahm wrote in an Aug. 7 opinion piece for Bloomberg. “While the economy is growing less quickly, it’s growing. There isn’t a recession, not less than not yet.”
One other point experts are stressing amid the changes within the labor market is that 4.3% unemployment is, historically, pretty good. The unemployment rate was higher than that for a 16-year stretch between 2001 and 2017. Only in June 2017 did it dip to 4.3% before dropping into the three% range that employees have grown accustomed to — pandemic notwithstanding.
“The labor market was decisively very tight. Now perhaps it looks like that is not the case,” Kayla Bruun, lead economist at Morning Seek the advice of, said through the briefing.
“Possibly it’s neutral,” she added. “We’re not ringing alarm bells.”
More from Money:
The best way to Prepare for an Interview: A Step-by-Step Guide
This Stock Market Stat Has Predicted 83% of Presidential Elections within the Past Century