U.S. Job Market Shows No Signs of Slowing Down

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The U.S. labor market is still red-hot. Morning Consult’s high-frequency labor data is broadly flashing green in June, with the share of U.S. adults who said they experienced pay or income losses ticking downward and the share that are actively looking for work still elevated. Our data also shows that more employed adults were feeling secure in their jobs in June and confident their employers would increase their salary if they asked for a raise.

With workers feeling that they have more leverage in a tight labor market, the Federal Reserve’s goal of bringing down nominal wage growth in a bid to cool inflation will be difficult. The Fed has signaled two more rate hikes this year, and, looking forward, would likely need to see a considerable amount of cooling in the labor market before feeling confident that inflation is on a path back toward the 2% target.

In the most recent week of data, Morning Consult’s Lost Pay and Income Tracker — which corresponds closely with UI claims data — fell back to around 10%. While the share of U.S. adults reporting lost pay or income is above March levels, it remains near series lows, reflecting the continued strength of a labor market where the vast majority of Americans who want jobs can get jobs.

Policymakers at the Fed are hoping that tighter monetary policy will help cool the labor market and bring down nominal wage growth. However, Morning Consult data suggests this might not be in the cards in the near term: In recent months, the share of employed U.S. adults who say their current employer is likely to comply with a request for a salary bump has ticked up considerably.

Despite some signs of cooling at the edges, the labor market is still very tight, and workers increasingly feel like they have leverage to ask for higher pay. Looking across income groups, higher-paid workers are most likely to say their employer is “very likely” to raise their pay when asked, but we see a steady upward trend among lower-income workers too.

The share of employed U.S. adults who are actively applying for new positions ticked downward at the end of June, bringing the four-week moving average of Morning Consult’s Job Search Activity Tracker in line with May levels. Search activity among prime-age adults also ticked lower in June, but the surge in the early months of 2023 still leaves both metrics above their previous peaks seen in early 2022. Overall, job search activity remains elevated, as a still-hot U.S. labor market entices already-employed adults into an active job search. Job switchers are experiencing considerably higher wage gains than job stayers, and the prospect of higher wages remains the leading reason cited by active jobs searchers in Morning Consult data.

This memo offers a preview of Morning Consult’s July U.S. Jobs & Labor Report. Morning Consult Economic Intelligence subscribers can access the full report here.