A tight US labor market stays tight - Jason Furman and Willie Powell III

September 2, 2022, Opinion: "The US labor market has been very tight for over a year now, driving up both nominal wage growth and price growth, and it remained tight in August. Job growth continued to be strong as employers added 315,000 jobs last month. While the unemployment rate increased to 3.7 percent, this was accompanied by a substantial improvement in labor force participation, so the employment rate, the share of the population that was working, increased as well. Both the payroll and household surveys showed similarly strong employment increases last month. Hours and wage growth showed some signs of cooling in August, with average weekly hours falling and wage growth slowing to a 3.2 percent annual rate (once adjusted for industry-level composition effects). Wage growth over the past three months, however, remained strong at 4.7 percent. This pace of wage growth is consistent with an underlying core PCE inflation rate of around 4 percent, well above the Federal Reserve’s target." Read Via PIIE

HKS Faculty Author - Jason Furman
HKS Affiliated Author - Wilson Powell III