Introduction
US Job Market 2024 slowed and signs of weakness appeared in July, the growth of new jobs is decelerating and it’s pronounced that if the jobs are growing less the unemployment rate also tick higher.
Furthermore, Americans classifying new unemployment claims also stood up at the end of the month. Investors showed up in early August to read this assemblage of softer labor market information as an economy warning sign leading to large equity market losses.
The newest data came just after the Federal Reserve voted to hold interest rates already, keeping up the fed funds target rate at a range of 5.25% to 5.50%, measuring is same as the previous year. The Fed specified that the interest rate could be reduced at its next meeting in mid-September.
Following the announcement of jobs statistics in early August, investors first expressed concern that the Fed had delayed starting rate decreases.
The U.S. Bureau of Labor Statistics announced the new jobs created in July by the economy and there are only 114,000 new jobs created.
This is the second-lowest monthly gain in more than four years. Additionally, the labor department amended lower June’s impressive job growth figure. And the job rate was revised to 179,000.
When job growth was slowing, the unemployment rate rose to 4.3%, its highest level since October 2021.
Slower Job Growth
A surge in the number of persons receiving unemployment benefits and attitude polls had long indicated a substantial downturn in the labor market.
This week’s government statistics indicate that June hiring was at its lowest level in four years, a result of the Fed’s rate hikes in 2022 and 2023, which have negatively impacted the labor market.
According to the employment data, which also revealed that last month’s annual salary growth was the weakest in almost three years, some Wall Street firms—including Bank of America Securities—moved forward their rate-cut estimates from December to September. Before the data, Goldman Sachs had only projected two rate cuts for this year; now, they anticipate three.
Notably, in June the growth of jobs gains occurred in healthcare, construction, transportation, and warehousing. The number of open positions relative to the available workers was changed resulting in an imbalance in the opportunities.
At the end of June 2024, according to the U.S. Bureau of Labor Statistics, the job openings in the U.S. were about 8.2 million, and 7.2 million unemployed persons were there in the scenario. The number of job openings was lower in 2024 but in recent months the stability can be seen.
What are the potential changes in the labor market?
The weekly new jobless claims data holds significant importance as economists analyze it closely to anticipate forthcoming changes in labor market dynamics.
One key metric within this data is the initial unemployment claims report, with the most recent figures indicating that for the week ending July 27, there were 249,000 claims filed.
Although weekly fluctuations in this statistic can be notable, the latest count represented the highest volume of jobless claims for the year 2024 so far.
This uptick in claims suggests potential shifts in employment trends, which could impact various sectors and have broader economic implications. Monitoring these figures closely allows experts to assess the health of the labor market and make informed predictions about future employment patterns and consumer behavior.
According to the analysis of senior economist Matt Schoeppner at U.S.Bank. the labor force participation rate in July, was 62.7% generally compatible with the rate throughout 2024.
The key criteria of the growth economy’s health is the Labor force participation.
Conclusion
This depiction is concluded, it is mentioned above the key criteria of economic growth. A higher rate of unemployment is an indication of the weakening of the economy, it directly affects the growth of the economy.
The U.S. Bureau of Labor Statistics releases a monthly unemployment rate report that sheds light on the state of the country’s economy. In general, an economy is more likely to be robust when the unemployment rate is lower.