The problem of unemployment is very important! The US authorities are trying to solve it but with mixed success. The recent increase in the US unemployment rate to 4.1% makes Federal Reserve officials take a more cautious stance and estimate potential risks.
Experts explain the rise in unemployment, obtained from a household survey, by the increase in the number of people looking for work rather than by a decrease in the number of jobs. According to current data, since the beginning of 2024, out of the 543,000 people with unemployed status, 75% are those who have re-entered the workforce (353,000) and those who have started working for the first time (99,000). This influx led to a 0.27% jump in unemployment this year.
Analysts admit that household survey data may not fully reflect the current immigration level. Moreover, recent data may indicate a significant supply of labor. The discrepancy between the number of available workers and vacancies is especially noticeable in industries with very low wages.
Such reports are at odds with the statements of Fed representatives, who claimed the US labor market was stabilizing. Officials believe that a further drop in economic demand could lead to a surge in unemployment. According to the minutes of the Federal Reserve meeting, the focus is now not only on inflation indicators but also on the level of employment in the country. Some FOMC members note that although the labor market is resilient, the ratio of job openings to the unemployed has returned to the level observed before the COVID-19 pandemic.
However, financial analysts believe that it is not correct to equate inflation with unemployment. These indicators are important, but each has its nuances. In this situation, it is crucial that the dual goal of the Fed, namely managing inflation and employment, remains intact. Against this backdrop, it is necessary to closely monitor the labor market.
