The unemployment rate may be near record lows but employment is still below pre-pandemic levels in 40% of US states.
With the Federal Reserve having raised its key interest rate to the highest since 2007 in an effort to get inflation back under control, attention now turns to whether the jobs market and wage gains have cooled enough to keep the central bank from further increasing borrowing costs. We’ll find out Friday with the release of the government’s employment data for April. The forecasts are for another solid report, keeping the jobless rate near record lows and reinforcing what Fed describes as a “very tight” national labor market. But is it tight?
On a more granular level, a highly uneven labor market has emerged depending on what part of the country you consider. This is a problem because the geographic differences are sizable but are generally ignored in the “Jobs Day” conversation about the labor market’s strength and could lead to policy mistakes. So, although employment reached its pre-pandemic level last summer on a national basis, about 40% of states, including some large ones such as New York and Ohio, remain well below where they were.
