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“This has been an extraordinary jobs recovery, but this kind of growth can’t last forever, especially now that the unemployment level is as low as it is,” said Scott Anderson, chief economist for Bank of the West in San Francisco. “It’s getting harder to find folks to come back into the labor market, even if you’re paying higher wages.”
The job market’s rapid rebound has been a cornerstone of the pandemic recovery and a major political asset for the Biden administration, even though the workforce has remained depressed by a number of factors, including retirement and caretaking. Employers posted a record 11.5 million openings in March — nearly double the number of job-seekers, according to a Labor Department report released earlier this week.
That continued strength has empowered the Federal Reserve to take aggressive action to curb inflation. The central bank raised interest rates this week by half a percentage point, the sharpest increase since 2000, in hopes of cooling the economy without sinking it into recession.
“We need to do everything we can to restore stable prices as quickly and effectively as we can,” Fed Chair Jerome H. Powell said Wednesday. “We think we have a good chance to do it without a significant increase in unemployment or a really sharp slowdown.”
Even so, there are signs of mounting uncertainty. The U.S. economy unexpectedly shrank in early 2022, largely because of widening trade gaps and falling inventory purchases. Inflation remains at 40-year highs. And stock market prices — which skyrocketed to records during the pandemic — have plunged in the past week, amid renewed fears of a possible recession this year or next.
“We’re in a weird stage in the cycle right now, where it isn’t completely clear what direction things are going in,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “Obviously it’s a skittish market environment, and we are starting to see some softening in different ways.”
But for many workers, the tight labor market continues to prove beneficial.
Leah Kush, who lives near Chicago, recently left her 11-year job in the radio industry for a position at a digital marketing firm. It all happened very quickly: Kush applied in early April, interviewed a week later and received a job offer less than 24 hours after that.
“It was so easy that I was like, ‘Wow, this was meant to be,’ ” the 41-year-old said. “I feel alive again.”
Kush is making 33 percent more than at her last job, where she hadn’t gotten a raise in eight years.
“There was no extra pay, but they kept piling stuff on my plate,” she said. “Finally in January, I said, ‘I have to find something new.’ And I’m so glad that I did.”
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