Labor Market Slows, Dimming Hopes of Workers Looking to Change Jobs
On the face of it, the jobs report released Friday (Sep. 6) had some good news — at least for those looking for confirmation that the Federal Reserve will cut rates this month.
Additionally, as a sign that the Bureau of Labor Statistics’ data was well-received, the Dow Jones Industrial Average was up Friday morning by about 0.5% (the other indices were flat). That could change as investors parse whether the Fed will cut rates by 0.25% or 0.5%. In the latter case, the read-across may be that the Fed waited too long to act on rates and is catching up, which might spook traders.
U.S. firms created 142,000 nonfarm jobs last month, which was lower than the roughly 161,000 positions that were expected as a consensus. The July data was revised downward too, as the latest 89,000 tally was a drop from the 114,000 roles previously estimated.
Where the Jobs Were — and Where They Were Not“In August, job gains occurred in construction and healthcare,” the bureau said in its release. Employment showed “little change over the month in other major industries,” including services, finance and retail.
As for wages, the data showed that in August, average hourly earnings for all employees on private nonfarm payrolls increased by 14 cents, or 0.4%, to $35.21. Over the past 12 months, average hourly earnings increased by 3.8%. The latest reading showed that at least, and at last, perhaps, wages are outpacing inflation.
But as the PYMNTS Intelligence report “New Reality Check: The Paycheck-to-Paycheck Report: Why One-Third of High Earners Live Paycheck to Paycheck” found, a few key avenues for alleviating the pressures of individuals and households living paycheck to paycheck are narrowing.
Throughout 2024, against a backdrop where 60% of consumers live paycheck to paycheck, most consumers have been living with the strain of paycheck growth outpaced by inflation.
Fifty-six percent of paycheck-to-paycheck workers who have issues paying bills said they were somewhat, very or extremely likely to find a new role in 2024. These struggling consumers considered changing jobs at nearly twice the rate of those not living paycheck to paycheck.
Younger demographics, including 57% of Generation Z consumers, were also more inclined to look for jobs.
A cooling labor market and downward revisions to previous gains — and the fact that job additions have been concentrated in a few sectors — may cause paycheck-to-paycheck consumers to reflect on their paths forward into the new year.
Without a sure sense of upward mobility in terms of a career path or salary and wage increases, paycheck-to-paycheck consumers may be hesitant to spend more in the fall and during the holiday shopping season. Rate cuts and a respite from interest rate pressures are welcome, but the picture remains mixed.
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