The Bureau of Labor Statistics Jobs Report published this morning kicked the Unemployment Rate up from 3.5% to 3.8%, which is still amazingly low. The BLS points out that over 700K people are looking for work right now but only 170K new openings became available last month, leaving a half million still blasting out their resumes.
The oversupply of current job applicants has allowed employers to taper wages for new hires, shrinking wage inflation by 1/10 to a year-over-year increase of 4.3%. The labor market has been the fluted marble column keeping the prices of goods and services elevated while higher interest rates have been working to curtail them from last year’s highs. For overall inflation to abate back down to the Fed’s 2.0% goal line, we’ll need to see greater unemployment and further wage erosion, which doesn’t sound particularly fun.
