The U.S. labor market is showing signs of cooling, a welcome relief for policymakers at the Federal Reserve looking for evidence that interest rate hikes are having the desired effect of slowing the economy. Morning Consult data likewise shows hints of cooling, with the incidence of lost pay or income ticking higher, the share of workers working full time down considerably from last year’s peak and fewer employees reporting staffing shortages compared with 2021 and 2022.
On the other hand, our high-frequency data continues to show residual strength in the labor market. Our Lost Pay and Income Tracker is still near series lows and workers are also generally very confident in their ability to negotiate a raise after years of labor market tightness and a stretch of nearly unprecedented collective action and U.S. labor strikes.
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