OSHA proposal aims to protect workers from extreme heat
On Tuesday, President Joe Biden announced the new rule to protect outdoor workers, if it’s adopted it would mark the nation’s first-ever federal safety standard to address excessive heat in workplaces.
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U.S. employers added 206,000 jobs in June as hiring held steady despite persistent inflation and high interest rates.
But the employment picture was mixed at best as job gains for April and May were revised down by a hefty 111,000 and the private sector added a disappointing 136,000 jobs.
Also, the unemployment rate, which is calculated from a separate survey of households, rose from 4% to 4.1%, the highest since November 2021, the Labor Department said Friday. The increase was triggered by an encouraging rise in the labor force − the pool of people working and hunting for jobs − that outstripped the number that landed positions.
Economists surveyed by Bloomberg had estimated that 195,000 jobs were added last month, so job creation modestly beat estimates.
But the job market in the spring was decidedly less buoyant than believed. Payroll gains were revised down from 165,000 to 108,000 in April and from 272,000 to 218,000 in May.
Broadly, economists say, the report could bolster the case for the Federal Reserve to cut interest rates as early as September.
Are wages falling or rising?
Average hourly pay rose 10 cents to $35, pushing down the yearly increase to 3.9%, the lowest since June 2021.
Wage growth generally has slowed as pandemic-related worker shortages have eased, but it’s still above the 3.5% pace that’s in line with the Federal Reserve’s 2% inflation goal.
Many Americans, meanwhile, have more purchasing power because typical pay increases have outpaced inflation the past year.
Will the Fed lower interest rates in 2024?
Despite the robust job gains, the report should be welcomed by a Federal Reserve looking for a softening job market, especially wage growth, which feeds into inflation.
“We think the Fed could certainly start the discussion about cutting rates at the upcoming (Fed) meeting, and lower the policy rate in September, if the data continue to show moderation,” Rubeela Farooqi, chief U.S. economist of High Frequency Economics, wrote in a note to clients.
Inflation eased substantially last year but picked up in the first quarter, leading Fed officials to say it will take longer than expected to gain confidence inflation is sustainably approaching their 2% goal. That has put off market-friendly interest rate cuts. Inflation resumed its slowdown in May, but Fed Chair Jerome Powell said officials want to see that trend to continue for several months.
Powell also has said a softening labor market could prod the Fed to act even if inflation doesn’t slow as rapidly as officials hope.
Since March 2022, the Fed has raised its key short-term interest rate from near zero to a 23-year-high of 5.25% to 5.5%, but it has held it steady since last July as price increases have downshifted from 40-year highs.
How is the job market doing right now?
So far this year, the job market largely has shrugged off high interest rates and softening but still elevated inflation, with payroll growth averaging well over 200,000 a month.
But average monthly increases have slowed to 177,000 in the second quarter from 267,000 the first three months of the year and 251,000 in 2023.
Forecasters expect a further gradual slowdown by the end of the year as high borrowing costs and prices take a bigger toll on consumer and business demand. Low- and middle-income households are struggling with near-record credit card debt and historically high delinquencies, contributing to a pullback in retail sales. And their pandemic-related savings have mostly run dry.
In May, job openings ticked up to 8.1 million, the Labor Department said this week. That’s still above the pre-pandemic level of about 7 million but below the record 12.2 million in March 2022 during severe COVID-19-induced labor shortages and the job-hopping frenzy known as the Great Resignation.
Hiring has dipped below pre-pandemic levels.
Although job growth has been remarkably resilient, that’s chiefly because employers have been reluctant to lay off workers after the labor crunches. Jobless claims, though, have edged higher in recent weeks, and economists expect layoffs to pick up by year’s end as average job growth downshifts to just over 100,000.
Meanwhile, unauthorized immigration, which also has boosted job growth by expanding the supply of available workers, has slowed since March, Morgan Stanley wrote in a research note. That too could curtail job growth, especially in industries such as construction, restaurants and hotels, the research firm says.