A “we’re hiring” sign in Arlington on June 3, 2022 in Virginia (AFP/Archives/OLIVIER DOULIERY)
An influx of new workers in August pushed the US unemployment rate to its highest level since February 2022, a signal that the situation is rebalancing after two years of labor shortages, and good news in the face of inflation.
The unemployment rate stood at 3.8% in August, against 3.5% in July, despite 187,000 job creations, more than expected, the Labor Department announced on Friday.
This paradox is explained by the arrival on the labor market, last month, of more than half a million people.
“It’s really encouraging,” greeted CNBC the director of the team of economists at the White House, Lael Brainard.
This is linked, she assured, to “the good economy (created by) President Biden, good jobs and good wages. People come back and go to work and the economy is much more resilient, much more balanced We see this balance in the labor market, and that’s why inflation has come down.”
A labor shortage since the Covid has indeed pushed employers to raise wages. This was good news for workers, but it contributed to soaring inflation.
As a result of this massive influx of new workers, the participation rate reached 62.8%, its highest level since February 2020, when it was 63.3%, just before the Covid put economic activity on hold. , suddenly destroying 22 million jobs.
A revision of the data for June and July nevertheless showed a total of 110,000 jobs created less than announced.
– Better balance –
August’s numbers are a “big step toward a normal labor market,” said Robert Frick, economist at Navy Federal Credit Union.
The unemployment rate in the United States (AFP/Samuel BARBOSA)
“The employment growth trend continued to slow, the unemployment rate rose, the labor force participation rate rose and income growth slowed, all signs that labor supply and demand work are better balanced,” said Nancy Vanden Houten, economist for Oxford Economics.
For more than two years, American employers have struggled to hire in sufficient numbers, due to early retirement and insufficient immigration in particular. The workers had left their jobs en masse to find others, offering better pay or better conditions, a movement called “great resignation”.
“There are always many more job offers than unemployed,” however nuance Mike Fratantoni, vice-president of the Association of Real Estate Bankers (MBA).
For example, in the middle of the back-to-school period, the city of Philadelphia (Pennsylvania) does not have enough school bus drivers, the famous yellow schoolbuses, and offers 300 dollars a month to parents who drop off their child themselves at school. ‘school.
– “Easing” –
The American central bank (Fed) is in the front line to slow down inflation.
Fed Chairman Jerome Powell on July 26, 2023 in Washington (AFP/Archives/SAUL LOEB)
Its main tool to achieve this is to raise its key rate, which in turn pushes banks to offer loans at higher interest rates to households and businesses.
These are then less inclined to consume or invest, which eases the pressure on prices.
The question now is whether or not the Fed will extend the hikes at its next meeting on September 19-20.
The Fed’s key rate (AFP/Archives/Sylvie HUSSON, Samuel BARBOSA)
It has done so 11 times since March 2022, bringing its interest rates to their highest in 22 years, within a range of 5.25 to 5.50%.
“A slowdown in wage pressures and an increase in the participation rate are encouraging, confirming some easing of labor market conditions”, underlines Rubeela Farooqi, economist for High Frequency Economics, estimating that these data plead in favor of a maintenance rates at their current level.
But inflation, which had been slowing for months, picked up again in July, driven by house prices. It stood at 3.2% over one year, against 3.0% the previous month, according to the CPI index of the Department of Labor, which refers.
© 2023 AFP
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