AmiSight 6/14: Are There Cracks in the Once-Believed Resilient U.S. Labor Market?

Is the job market as robust as we have been led to believe? New data is casting doubt on the rosy picture previously reported. 

Although U.S. employment data for May showed the average monthly gain was higher than pre-pandemic years, the monthly average of new nonfarm payrolls appears to have been closer to 190,000, down from the 250,000 earlier reported, according to the Quarterly Census of Employment and Wages. 

In a LinkedIn post, Doubts cast on US payroll data, several business reporters question if the Federal Reserve has set interest rates too high in an attempt to lower labor costs and slow inflation. 

Although the pandemic years have often been characterized by labor shortages and the Great Resignation, broader statistics seem to reinforce what Federal Reserve officials feel is a gradual softening of the job market, as several reports show a steady decline in employment at small businesses.