Kris Venezia discusses the state of the labor market here:
Hi, my name is Kris Venezia from Eckman Wealth Management. And today I'm going to be talking to you about the labor market, which is and has been for a couple of years now, incredibly hot. So I'm talking to you on Friday, July 7th. We got a nonfarm payroll report today. In that report, the headline numbers: 209,000 jobs were added in the month of June. Unemployment rate sitting at 3.6%.
Now, there's two specific parts of the nonfarm payroll that I'm paying attention to because I think they are the two most important parts that pertain to inflation, which is still stubbornly high. So the first one of those is wages. We get a reading in the nonfarm payroll report on hourly wages. The first number is .4%. - that's how much it went up month over month from May to June. 4.4% is your year-over-year number on wages. Those numbers are higher than policymakers would like, indicating more inflationary than policymakers would like.
The second part I want to point out in this jobs report is on labor force participation, which is around 62%. It's been at the same level for the last four months. It's below pre-pandemic levels. And it's been a really big point of frustration for policymakers and economists when it comes to that fight against inflation, because the labor market, because the labor force, we have these fewer people participating in the labor market than pre-pandemic levels, but we have all these jobs that have been created since the pandemic started. So there's this imbalance between people looking for work and the number of jobs available, and that creates inflationary pressure.
The positive when it comes to labor force participation is this prime age group, which is 25 to 54. I didn't come up with those numbers. That is decided by the Bureau of Labor Statistics put this report together. That's what they indicate is the prime age working group, which is 25 to 54. That age group is participating at higher levels than we've seen in a couple decades. They have more full time jobs than we've seen in a couple of decades. So we are seeing participation from that 25 to 54 age group.
The problem seems to be in that over 55 age cohort. And if you look at what happened during COVID, people maybe got laid off and got severance packages and decided to bridge that into retirement. You also had some people who, you know, 2020 - 2021, were looking at the 401k and looking at their job and deciding, Hey, this is a great time to retire.
So really, when you look at that labor market imbalance, the key area that stands out to me is that we have this over 55 age group that has left the labor market to retire. You know, they've worked a long time, deserved that retirement. But we're trying to fill those gaps and we're struggling to fill that gap between number of jobs available and people looking for work. And just to give you an idea of what that is, there's over one and a half jobs available for every person looking for a job.
So clearly, a labor market imbalance, but trends are heading in the right direction. Job openings have fallen below 10 million. You know, labor force participation with that prime working group continues to slowly tick up. So there's some progress on that front. But there still is this massive imbalance in the labor market. And you can see it when you're going out and about. I'd say look at restaurants, service industry type jobs. You'll probably notice now that I pointed this out, you'll see more help wanted signs in those industries because those are the industries right now that are trying to fill that labor gap that's been been left by that 55 plus group, which is retired.
So there's a nice little overview on the labor market for you once again, Kris Venezia - Eckman Wealth Management. Make sure to subscribe. We'll have more of these videos coming out for you weekly. Thanks.