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2025-09-18 20:40:58
[The Mystery of the US Labor Market: A "Strange Balance" Between Job Supply and Demand] ⑴ The US labor market is weakening, with both job supply and demand weakening, creating a "strange balance." Although initial unemployment claims fell to 231,000 last week, slightly below market expectations of 240,000, this was partly due to identity fraud. ⑵ The Federal Reserve Chairman stated that the balance created by declining supply and demand is leading to a rising unemployment rate. US nonfarm payrolls increased by only 22,000 in August, averaging 29,000 per month over the past three months. ⑶ Despite relatively low layoffs, hiring has almost stagnated, extending unemployment. The average length of unemployment in August rose to 24.5 weeks, the longest since April 2022. ⑷ To support the labor market, the Federal Reserve lowered its benchmark overnight interest rate by 0.25 percentage point to a range of 4.00%-4.25%, and projects steady rate cuts throughout 2025. Previously, the Fed paused its rate cuts in January due to uncertainty surrounding Trump's tariff rhetoric. ⑸ Institutional surveys show that job growth may have been overestimated by 911,000 jobs in the 12 months ending in March.
