The Bureau of Labor Statistics’ monthly state employment snapshot 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 by Refinitiv.
The report follows a mixed bag of recent employment data: The latest vacancies and labor turnover survey, released Wednesday, showed that there were 11.3 million vacancies in May, or 1.9 vacancies for every jobseeker, and historic low levels of layoffs.
While that’s good news for job seekers, there are also signs that employers are starting to make cuts. New job cuts data released Thursday by Challenger, Gray & Christmas showed U.S. employers announced 32,517 layoffs in June, a 58.8% increase from the same month last year and the highest monthly total since February 2021. Overall However, job losses in the first six months of the year are down 37% from the first half of last year and are at their lowest level since records began in 1993. The US job market is clearly not in a recession. However, unemployment can be a lagging indicator. In recent weeks, major tech and real estate companies have announced layoffs (including Netflix, Tesla, and Redfin) or signaled they will pull back hiring plans (like Meta, Twitter, and Apple). The details in Friday’s jobs data could help economists, policymakers and business leaders figure out if this latest spate of layoff announcements and hiring freezes are merely industry-centric corrections after years of untamed growth, company-specific one-off effects or signs of general weakness. Historically high inflation has prompted the Federal Reserve to launch a campaign of raising interest rates to cool the economy, but these efforts are not without costs: when companies tighten their belts, it usually results in job cuts. Fed Chair Jerome Powell said he was aware that rate hikes could cause “pain” in the labor market, but also expressed hope that if successful, the policy measures could allow the economy to continue growing while curbing inflation. The latest Fed forecasts see the unemployment rate rising to 4.1% in 2024.
“We’re already seeing some companies slowing down in hiring, whether through hiring freezes or just being slower to fill their existing vacancies,” 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 invariably be layoffs, but the hope is that if the recession is mild, then layoffs will be contained and any rise in unemployment will consequently be smaller.”
Overall, the U.S. job market is still in a phase of incredibly high demand for labor, said Layla O’Kane, chief economist at jobs data firm Lightcast.
“We’re seeing very high openings and very low separations,” she said, referring to the latest JOLTS data. “Right now, companies are still looking for a lot of workers and trying to fill those positions. I would be surprised if the job market turned into a harsh labor market anytime soon.”
CNN’s Nicole Goodkind contributed to this report.