September 13, 2024
The New York Times had a piece noting that, while we don’t see evidence of an increase in layoffs, we have seen a downturn in hiring which has been associated with a 0.8 percentage point rise in the unemployment rate since April of last year. The piece notes that the monthly rate of job creation has slowed to just 115,000 in the last three months, down from 451,000 in the same months two years ago.
It is worth noting that we are hitting the peak retirement years for the baby boom cohort. The youngest turn 60 this year, while the oldest are 78. In 2020, before the pandemic, the Congressional Budget Office (CBO) projected we would be creating just 20,000 jobs a month in 2024.
As a result of larger than expected immigration, we have been creating far more jobs than had been projected. With immigration now having slowed sharply, it is not clear how many jobs need to be created monthly to prevent the unemployment rate from rising. It is not clear that the June to August pace is too slow.
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