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What's the status of America's labor market this Labor Day and why does it matter?

The job market is being watched closely for signs of a recession
Explaining August Jobs Report
Posted at 5:00 AM, Sep 05, 2022
and last updated 2022-09-05 15:51:25-04

WASHINGTON — On this Labor Day, it makes sense to talk about labor.

That's what President Biden is doing at events in Wisconsin and Pennsylvania.

So what is actually the state of our labor market, and why does it especially matter this year when it comes to inflation and interest rates?

PEOPLE ARE WORKING

Right now, America's workforce is, well, working.

The unemployment rate is now 3.7%. That's close to a record low.

For perspective, during the 2009 recession, it hovered around 10%.

In April of 2020, when COVID lockdowns began, it was at 14.7%.

In fact, some economists say the biggest issue with our economy is that business owners are having trouble finding employees.

In July, there were 11.2 million job openings across the U.S, a near record too.

It's why some businesses can't stay open or offer the level of service they would like.

Job data is important because it shows businesses are still hiring and business owners aren't instituting a hiring freeze because of a possible recession.

Job openings also mean you may still have leverage on your boss when it comes to asking for a raise since finding workers to replace you could be challenging.

NOT ALL GOOD NEWS

The Federal Reserve, the independent central bank in the U.S., isn't necessarily celebrating all these job openings.

Chairman Jerome Powell is trying to lower inflation.

Some economists believe too many job openings can lead to higher wages, making inflation worse.

It may sound odd, but some economists would actually like higher unemployment rates and less money in your pockets so that inflation can come down.

It's why the fed is continuing to raise interest rates, making credit card debt and loans more costly.

UNIONS INFLUENCE

Still, on this Labor Day, the latest data indicate many workers in our country feel under-appreciated.

It's one reason why unions are seeing a resurgence.

In 2022, unions have won 641 elections.

That's the most in 20 years, according to Bloomberg.

Over 200 Starbucks locations are unionized on this labor day for the first time.

In fact, the first half of 2022 saw a 76% increase in the number of strikes nationwide because of employee frustration.