The fight against inflation requires a slowdown in economic activity, and therefore a deterioration in the job market. The unemployment rate climbed to 4.3% in July. The August rate will be published on Friday, and is expected at 4.2%.
More selective employers, slower job seekers: Some parts of the United States are seeing a slowdown in the labor market, but employment levels are generally stable or even rising slightly, a Fed survey showed Wednesday. “Employment levels have remained broadly stable or even increased slightly in recent weeks”the US Central Bank said in its “Beige Book”a survey carried out at the end of July and in August among the country’s businesses and economic players.
Nevertheless, “Some regions reported that companies had reduced teams and hours, left advertised positions vacant (…), although cases of layoffs remained rare”details this document. Thus, specifies the «Beige Book», “Employers have been more selective in hiring and less likely to increase their workforce, citing concerns about demand and an uncertain economic outlook”. “As a result, candidates faced increasing difficulties and longer delays in finding employment.”et “As competition for workers eased and turnover declined, firms felt less pressure to raise wages.”.
Unemployment reaches 4.3% in July
The unemployment rate climbed to 4.3% in July. The August rate will be published on Friday, and is expected at 4.2%. The fight against high inflation requires a slowdown in economic activity, and therefore a deterioration in the job market, while the United States has experienced three years of labor shortages. “Cases of layoffs remain rare”the Fed also notes.
It is preparing to start lowering rates, and should launch the movement at its next meeting, on September 17 and 18. To counter the surge in inflation, which in 2022 was at its highest in more than 40 years, it raised its rates. These are currently in the range of 5.25 to 5.50%.
