The Federal Reserve Bank of New York’s latest survey on consumers’ labor market experiences and expectations showed a decline in job, wage, and benefits satisfaction in July. The survey revealed that fewer people were employed, a record number of people were looking for jobs, and the average expected likelihood of becoming unemployed rose to 4.4%, the highest on record for the 10-year-old survey. Despite these unsettling statistics, the survey also showed that Americans still believe opportunities exist in the job market.
Job offer activity was steady in July compared to the previous year, and the average expected likelihood of receiving at least one job offer increased. The average reservation wage, the minimum wage one would accept for a new job, remained significantly higher than pre-pandemic levels. In July, the average reservation wage was $81,147, a slight decrease from the series high set in March of that year. The 31.4% increase in the average reservation wage since March 2020 can largely be attributed to inflation.
While job growth has slowed in recent months as the US labor market has become more balanced against a slower-growing economic backdrop, there is no clear sign of an impending recession or deterioration in the labor market. July’s monthly job total of 114,000 was lower than expected, causing the unemployment rate to rise to 4.3%. However, economists believe that the surprising report does not necessarily indicate a recession, as layoffs remain relatively low. The upcoming jobs report due on September 6 will provide more insight into job growth trends.
It is important to note that the data revisions from the Bureau of Labor Statistics due out on Wednesday could potentially shed more light on whether job growth over the past year has been slower than initially reported. Despite the challenges in the labor market, Americans are staying optimistic about finding new job opportunities. The average reservation wage has increased significantly since the start of the pandemic, providing some stability in a changing job market. The trajectory of the average reservation wage suggests some improvement compared to the years before the pandemic.
While the labor market may be going through a transitional phase with slower job growth, there is still hope for Americans seeking new opportunities. The survey data reveals a mix of concerns and optimism among consumers, as they navigate through the changing landscape of the labor market. It remains to be seen how future economic trends and policy decisions will impact job growth and overall job satisfaction in the US. As the Federal Reserve Bank of New York continues to monitor consumers’ experiences and expectations, it is crucial for policymakers to assess the evolving labor market conditions and implement measures to support job creation and economic stability.
