July’s weaker-than-expected jobs report fueled fears that the Federal Reserve’s focus on fighting inflation has come at the cost of the labor market’s health. Meanwhile, job openings and hiring have both considerably slowed, indicating a tight labor market. American Staffing Association chief economist and head of research Noah Yosif joins Asking for a Trend to break down the state of the job market.
"Markets clearly had a panic attack over July’s jobs numbers. However, once they took a step back to look at the broader picture, they were able to course correct. July’s numbers were certainly not great. However, in the bigger picture, the labor market is still considerably healthy," Yosif explains. He notes that the unemployment rate, despite being high, remains at a "very healthy level." He adds that worker productivity is also increasing as a result of higher borrowing costs and wages are accelerating faster than inflation.
He adds, "We’re seeing declines within the staffing industry get smaller and smaller every month. And because of that, there is good reason to believe that the labor market might also hit a very similar plateau from which it could rebound once interest rates begin to decelerate." Yosif explains that while there’s been a slowdown in hob hopping, sectors like health care and government services are seeing a "significant amount of labor churn at healthy levels."
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