Recession fears have mounted in recent weeks, as inflation continues to strain household budgets and the Federal Reserve appears set to raise interest rates and further slow the economy.
As if blissfully unaware, however, the job market has thrived. Hiring last month exceeded expectations and defied warnings of a downturn.
But the good jobs news could ultimately imperil the economy. Wages last month grew a blistering 5.1% compared to a year earlier, offering welcome relief for workers but also sobering news for Fed officials fearful of runaway inflation driven by income gains.
In turn, a lesser known data point has drawn outsized attention: the share of the adult population not working or actively looking for work. If workers are in ample supply, it gives the labor market some slack and limits wage growth. However, workforce participation came in at 62.1% last month, markedly lower than the pre-pandemic level of 63.4%.
Americans “should be worried about it,” Stephanie Roth, a senior market economist at J.P. Morgan Private Bank, told ABC News. The firm predicts a recession as the most likely outcome for the economy, she said, adding that “a continued tight labor market and high wage inflation would be a key reason.”
The alarm raises a key question at the heart of the economy: How can millions of missing workers stay on the sidelines while affording to pay their bills?
Here’s how unemployed people have kept up their lives and why it matters:
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Article URL : https://abcnews.go.com/Business/millions-missing-workers-making-job/story?id=94480152