Source: Fortune.com
Summary
The US labor market is expected to undergo a significant shift due to President Trump’s immigration crackdown and the surge in baby boomer retirements. According to a report by Oxford Economics, the breakeven rate of employment growth, which is the number of net new jobs needed each month to keep the unemployment rate steady, has fallen to around 50,000 new jobs per month, down from over 200,000 in 2022 and 2023. This means that payrolls can be stagnant or shrink, and the unemployment rate will hold steady instead of climbing.
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The numbers tell one story.
The labor market’s speed limit is much lower than just a few years ago, setting the stage for a jobless expansion. Oxford Economics forecasts that the breakeven rate will fall to zero next year and turn slightly negative in 2028. Despite this, job growth is expected to stay slightly positive, and the unemployment rate will experience gentle downward pressure. Employers are reluctant to shed workers due to concerns that the labor market will tighten soon.
The labor market is becoming so backward that the economy will have to shed jobs to keep unemployment steady.
Author: Evan Null
