The job search period for the unemployed is prolonged, and experts say the U.S. labor market is "weakened"
2024-08-13
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Recently, a joint report released by two online shopping platforms, Red Balloon and American Market Network, showed that the US job market situation has become increasingly severe in recent months, and nearly half of job seekers in the United States need more than a year to find a new job.
The study, based on interviews with 100,000 job seekers and employees, found that 44% of job seekers have been unemployed for more than 12 months. About 64% of job seekers said it was more difficult to find a new job than six months ago, and 71% said their financial situation was worse than a year ago.
△ Screenshot of the report on the US Newsweek website
Wang Jinbin, Vice Dean of the School of Economics at Renmin University of ChinaIn an interview with China Media Group Global News, analysts pointed out that the survey report showed that the U.S. labor market is cooling down.
Judging from the labor market data released by the United States in July, the number of temporary unemployed people is increasing, and the number of nearly 250,000 is a considerable scale.
From the perspective of the labor market, unemployment always starts with temporary unemployment. As the number of temporary unemployed people continues to increase, permanent unemployment will increase. Once permanent unemployment increases, it means that there is a very clear signal of weakness in the U.S. labor market.
According to the July data, permanent unemployment has increased slightly, but due to the sharp increase in the scale of temporary unemployment, this report can be seen as a signal that the US labor market is weakening.
Data released by the U.S. Department of Labor on the 2nd of this month showed that the number of non-farm payrolls in the United States increased by 114,000 in July, far below market expectations. At the same time, the latest data also showed that the U.S. unemployment rate rose to 4.3% in July this year, the highest since October 2021.
△ Screenshot of Associated Press report
Combining the increase in unemployment and the lower-than-expected employment growth reflected in the two sets of data, Wang Jinbin believes that if the employment situation further tightens, the probability of the Federal Reserve cutting interest rates in September this year to stimulate the economy will further increase.
The Fed has not explicitly discussed the issue of interest rate cuts in September, and its attitude is rather vague. However, the unemployment rate rose to 4.3% in July, and the market's expectations of a hard landing or recession in the US economy have increased. The market hopes that the Fed will cut interest rates as soon as possible, but the Fed believes that there is no urgent need yet.
If unemployment data continues to rise for several months in the future, it means that the permanent unemployment rate in the US economy is rising, which will definitely force the Federal Reserve to consider cutting interest rates in September, and even consider increasing the extent of the rate cut.
