The US is the world’s biggest economy. However, the beginning of 2018 saw it faced with difficulties in its labour market with slow growth rates and a static level of unemployment.
The US Department of Labour reported that the previous month of March saw the number of jobs available on the market stand at only 103,000, a decline of 210,000 compared to February. Although this year’s average of 218,000 is currently higher than 2017’s, which was reported at only 182,000, the US has seen a stagnant rate of unemployment for the last six months, remaining at 4.1 percent. This is reflected more in the younger side of the workforce.
Senior Economic Analyst, Mark Hamrick, believes the reason behind this slow rate of growth is the capacity of the job market which is “widely regarded to be close to full employment”.
The US’s manufacturing and healthcare sector have seen the most inflows of labour, with the majority of others only being able to offer minimal opportunities.
Sophia Koropeckyj of Moody’s Analytics suggests, “there is only so much of a boost you can get because a lot of people are structurally unemployed.”
She continued to say there is little expectation of labour force growth, similar to February’s rate, due to challenges from skill gaps and geographical disparities.
Other US analysts believe the total drop is also attributed the change in weather with March seeing a spell of freezing weather. This led to the demand in huge industries such tourism and construction to fall, resulting in many workers being laid off.
The US labour market has seen some positives, however. Wages have continued to grow with the average hourly rate of a private sector worker reaching $26.82, an increase of 2.7 percent since last March. Federal Reserve economists do also believe that the unemployment rate could fall further in the next two years to 3.6 percent, the lowest for fifty years.