An increasing number of Americans are experiencing apprehensions about potential job loss.
The most recent survey conducted by the Federal Reserve Bank of New York regarding consumer experiences and expectations within the job market revealed a decline in job, wage, and benefit satisfaction in July. This decline was accompanied by a decrease in employment rates, a record high number of job seekers, and an elevated anticipated chance of unemployment, reaching 4.4%. This figure represents the highest on record for the survey, which began a decade prior.
Despite these unsettling figures, Americans still perceived a wealth of opportunities in the job market.
The number of job offers remained consistent from July 2023, and the probability of receiving at least one job offer increased from the previous year. Furthermore, the minimum acceptable wage for a new job remained significantly above the July 2023 rate and noticeably higher than pre-pandemic levels.
The average minimum acceptable wage in July was $81,147, demonstrating a minor decrease from the record high of $81,822 achieved in March of the same year, as suggested by the survey. Conducted every four months, this figure has witnessed a 31.4% increase since March 2020; however, the majority of this growth can be attributed to inflation.
If we exclude inflation, this growth equates to a meager 8.2% increase over the same time period. Although the real-term average minimum acceptable wage showed no significant change since 2021, its trajectory has outperformed the one observed during the four years preceding the pandemic, when it was experiencing a decline.
The rate of job growth has slowed significantly, particularly in recent times, as the US labor market adjusts to a more balanced situation against the backdrop of a slowing economic growth.
However, July saw a surprisingly low monthly job total of just 114,000, leading to a rise in unemployment rates, up to 4.3%. Though this data led to a downturn in the markets, economists advised that it does not necessarily imply an imminent recession or a complete deterioration in the labor market. They noted that layoffs continue to remain relatively low.
The next job report is slated for September 6. Data revisions anticipated from the Bureau of Labor Statistics on Wednesday may offer insights into whether the job growth observed over the past year has been slower than initially reported.
Businesses may struggle in this economic climate due to the high minimum acceptable wages and rising unemployment rates.
Despite the slight drop in the average minimum acceptable wage, the economy continues to face challenges with slow job growth and high unemployment rates impacting various sectors of business.
