The number of people looking for a job in the Federal Reserve’s latest labor market survey rose to its highest level since 2014, the U.S. central bank reported Monday, as fears simmer about a broader slowdown in the economy.
The proportion of respondents seeking employment over the past four weeks jumped to 28.4 percent from 19.4 percent in July of last year, according to the Fed’s Survey of Consumer Expectations (SCE) labor market survey.
The increase in job seekers was most noticeable among people who are older than 45, who don’t have a college degree, and whose income is below $60,000, Fed researchers noted.
The survey also showed decreased satisfaction with pay and benefits among employees. Approval ratings on wage levels dropped by 3.2 percent, while they fell by 8.6 percent on non- wage benefits and by 9.3 percent on the opportunities for promotion.
There has been a steady decline since the pandemic in the average expectation of people that they will work until they are older than 67. That trend reversed in the latest survey, however, as 34.2 percent said they expected to work beyond the age of 67, compared to 32 percent last year.
Despite the tougher outlook, the survey showed that workers are still able to switch jobs with relative ease, reflecting increased “churn” in the labor market.
The rate of moving to a new employer increased to 7.1 percent, the highest level since the survey began in 2014. The increase was mostly due to women changing jobs, the survey found.
The economy is likely at an inflection point following a series of interest rate hikes by the Federal Reserve. Markets widely expected the Fed to start cutting interest rates at the next meeting of its rate-setting committee in September.
In July, Federal Reserve Chair Jerome Powell told Congress that central bankers were no longer worried just about elevated inflation, which rose as high as a 9-percent annual increase in 2022, but also about an uptick in unemployment.
“We are well aware that we now face two-sided risks," Powell told the Senate Banking Committee.
Those concerns were substantiated in the latest jobs report from the Labor Department, which saw unemployment rise to 4.3 percent in July from 4.1 percent in June. The economy added 114,000 job in July, falling well short of expectations after surpassing them in consecutive months over the course of 2023.
The jump in unemployment triggered a prospective recession indicator known as the Sahm rule, which says that the economy has entered a recession once the three-month average unemployment rate jumps half a percentage point above its recent 12-month low.
Markets took a sharp dive on the news earlier in August and were further shaken by an increase in the Bank of Japan’s interest rate, which rattled hedge funds that had borrowed the relatively cheap Japanese currency to make trades and buy U.S. equities.
