The monthly government employment picture from the Bureau of Labor Statistics is expected to show continued strength – smaller, but still significant, job gains of around 272,700 and an unemployment rate of 3.6%, according to estimates from Refinitiv.
The report comes on the heels of a mixed bag of recent employment data: The latest survey on job openings and job turnover, published on Wednesday, showed that there were 11.3 million vacancies in May, or 1.9 positions for every job seeker, and historically low. levels of redundancies.
While this is good news for job seekers, there are also signs that employers are starting to cut back. New austerity data released Thursday by Challenger, Gray & Christmas revealed that U.S. employers announced 32,51[ads1]7 layoffs in June, an increase of 58.8% from the same month last year, and the highest monthly total since February 2021. Total number of layoffs through the first six the months of the year, however, are down 37% from the first half of last year and are at their lowest levels since record highs began in 1993.
The US labor market is clearly not in a recession. However, unemployment may be a lagging indicator. In recent weeks, large companies in the technology and real estate industry have announced layoffs (among them Netflix, Tesla and Redfin) or have signaled that they will retire on employment plans (such as Meta, Twitter and Apple).
The details of Friday’s job data could help economists, politicians and business leaders find out if this recent wave of layoffs and layoffs are just industry-centric corrections after years of untamed growth, company-specific disposals or signs of broader weakness.
Historically high inflation has forced the Federal Reserve to launch an interest rate hike campaign to cool the economy, but this effort does not come at no cost: When companies tighten, it usually results in cuts.
Fed Chairman Jerome Powell has said he is aware that interest rate hikes could lead to “pain” in the labor market, but has also expressed hope that if they succeed, policy-making could allow the economy to continue to grow while curbing inflation. The latest estimates from the Fed show that unemployment is ticking up to 4.1 percent in 2024.
“We are already seeing some companies begin to retire on hiring, whether it is through layoffs or simply acting more slowly to fill their existing job openings,” said Daniel Zhao, senior economist at Glassdoor. “This is the first step companies take when they expect the economy to slow down. If there is a recession, there will probably be layoffs as a result, but the hope is that if the recession is mild, layoffs will be kept in, and a possible increase in unemployment will be lower as a result. “
More generally, the U.S. labor market is still in a period of incredibly high demand for workers, said Layla O’Kane, senior economist for labor market data firm Lightcast.
“We see very high openings and very low separations,” she said, referring to the latest JOLTS data. “Right now, companies are still looking for lots of workers and trying to fill those positions. I would be surprised if the labor market shifts to a tough market for workers soon.”
CNN’s Nicole Goodkind contributed to this report.
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