Economics
State of the U.S. Labor Market: Hidden Soft Spots
Report summary
As inflation cools and the Federal Reserve starts to reverse its cycle of interest rate hikes, the strength of the labor market will be a make-or-break factor shaping the U.S. economy's chances for a "soft landing".
While unemployment has risen from 2023 lows, it remains low. Furthermore, the workforce has so far avoided mass layoffs, instead continuing to add jobs. This report takes a look at where the labor market currently sits, spotlighting how higher rates since 2022 have manifested in hidden soft spots and examining how these dynamics are impacting workers, households and the economy overall.
Key Takeaways
- The U.S. labor market has cooled substantially since the Federal Reserve began lifting interest rates in 2022, but firms have continued to resist layoffs, potentially setting the stage for a soft landing as the Fed pivots to rate cuts.
- While workers have been fortunate to avoid mass job losses, softening labor demand has manifested in alternative ways, such as fewer job openings, shorter work days, and reduced wage bargaining power.
- Cost pressures from several years of elevated inflation remain a motivating force for U.S. adults — both employed and unemployed – to look for new jobs, with many part-time workers citing a desire to work more hours and a growing share taking on second jobs.
Data Downloads
Pro+ subscribers are able to download the datasets that underpin Morning Consult Pro's reports and analysis. Contact us to get access.
Download This Report with Your Morning Consult Pro Subscription
Methodology
This report draws from a combination of Morning Consult’s proprietary tracking data and in-depth topical surveys, paired with relevant data from government statistical agencies such as the Bureau of Labor Statistics. The main data sources underlying this report include:
- Daily, weekly and monthly data from Morning Consult’s U.S. Jobs & Labor Tracker.
- A survey of 4,428 U.S. adults that fielded from September 27-29th covering topics including labor market conditions, workforce inequality, remote work and more.
About the author
Kayla Bruun is the lead economist at decision intelligence company Morning Consult, where she works on descriptive and predictive analysis that leverages Morning Consult’s proprietary high-frequency economic data. Prior to joining Morning Consult, Kayla was a key member of the corporate strategy team at telecommunications company SES, where she produced market intelligence and industry analysis of mobility markets.
Kayla also served as an economist at IHS Markit, where she covered global services industries, provided price forecasts, produced written analyses and served as a subject-matter expert on client-facing consulting projects. Kayla earned a bachelor’s degree in economics from Emory University and an MBA with a certificate in nonmarket strategy from Georgetown University’s McDonough School of Business. For speaking opportunities and booking requests, please email [email protected]
