On the surface, the U.S. labor market looks strong: Job growth is chugging along and the unemployment rate remains below 4%.
The healthy labor market is a big part of why the Federal Reserve has felt confident enough to keep its monetary policy so restrictive. Remember: The Fed has two mandates, keeping inflation in check and maintaining “maximum” employment.
So far so good. But on a closer look, there are some cracks in the job market, especially when it comes to white-collar jobs.
More Than Meets the Eye
White-collar workers find it harder to find a job today than it was at the beginning of 2023.
Although the economy is adding jobs overall, most new positions are within the healthcare, education, and hospitality sectors. Without those industries, America’s private sector lost jobs in the second half of 2023, especially in the professional and business services category.
Overall hiring rates have also seen a significant cooldown since their peak in October 2021 and now sit below pre-pandemic levels.
Part of the Plan?
This cooling in the job market might be bad news for white-collar job seekers but just what the Fed intended and part of its plan to continue to bring down inflation. Some economists see it as a much-needed correction to bring balance back to the job market.
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