The American jobs market is sending conflicting signals that have economists, investors and policymakers deeply concerned about potential turbulence ahead. Despite a decade of remarkable performance, recent data suggests the labour market might be approaching a critical turning point.
Warning Signs Emerge in Labour Data
Recent months have seen Americans growing increasingly anxious about job security, with the Federal Reserve responding by cutting interest rates at its two most recent meetings. Jerome Powell, the central bank's chair, describes this monetary easing as "risk management" - essentially insurance against a deeper economic downturn.
The numbers tell a worrying story. Job openings have been gradually declining for the past year or two, while unemployment has been creeping upward, currently standing at 4.4%. Christopher Waller, a potential successor to Powell, is advocating for faster and deeper rate cuts, pushing for action at the next Fed meeting scheduled for December 10th.
Contrasting Economic Realities
This concern emerges against a backdrop of what has been an extraordinary period for American workers. For nearly a decade, excluding the pandemic disruption, unemployment has hovered around 50-year lows. Wages have surged sufficiently to outpace even the highest inflation since the 1970s, with the poorest Americans benefiting most significantly.
Real wages for the lowest earners have increased by 19% since 2015, compared to 11% for highest earners. Yet inflation remains stubborn at 3%, nearly five years since the Fed last achieved its 2% target.
The case for concern rests on three pillars: the consistent downward trend in job openings, increasing layoff announcements from major companies, and gloomy survey data about consumer confidence and job-finding prospects.
Reasons for Optimism Amid the Gloom
Despite these warning signs, several indicators suggest the pessimism might be overstated. While unemployment has risen to 4.4%, this level remains modest by historical standards - the rate has been higher nearly 75% of the time since 1948 when comparable data collection began.
The share of prime-age workers (25-54 years) employed has held steady at around 80%,接近历史最高水平. September saw the creation of 119,000 new jobs, significantly exceeding forecasts of approximately 50,000. Jobless claims remain low, and while people express concern about finding new employment, few actually expect to lose their current positions.
Goldman Sachs analysis indicates that layoff announcements typically precede actual jobless claims by about two months. The bank now estimates a 25% probability of unemployment rising by half a percentage point over the next six months, up from 10% in spring.
Economic Buffers and Future Prospects
The strongest argument against an imminent jobs collapse is the absence of a compelling reason for one. GDP growth appears strong for the third quarter according to the Atlanta Fed's widely monitored "nowcast." Stock markets have been performing well, corporate debt markets show minimal default risk, and wage growth remains solid.
The Sahm Rule, a popular recession indicator that tracks rapid unemployment increases, briefly entered danger territory in August 2024 but has since retreated. Current unemployment increases have been more gradual than the threshold that typically signals recession.
While AI-driven automation poses a potential threat to jobs, surveys indicate adoption has actually tapered off in most economic sectors. A more plausible explanation for current labour market weakness might be policy uncertainty, which now shows signs of easing as businesses adapt to new realities.
American workers' remarkable decade-long hot streak might still have room to run, provided the broader economy maintains its momentum and the Federal Reserve's preemptive measures prove effective.
