13 July 2023
A remarkable feature of the global economy over the past year has been the strength of the US job market.
While advances in Artificial Intelligence such as self-driving cars and large language models threaten future employment prospects for many, the reality is that over the past two years the US has been the best labour market for job seekers in two decades, with between 1.6 and 2 jobs per unemployed person in the country.
This has led to a recovery in wage growth that had previously been absent for several years and remains one of the Fed’s key concerns regarding inflation.
Recent data shows that this is starting to change, and with several headlines of layoffs and hiring freezes across large corporates, will the US labour market weaken enough over the next few months to allow the Fed to start contemplating rate cuts?
Source: U.S. Bureau of Labor Statistics
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