High-Frequency Data From Thousands of Weekly Interviews Signals Labor Market Slowdown
The share of U.S. adults reporting lost pay or income increased from 11.0% in June to 11.7% in July, according to the latest high-frequency economic data from Morning Consult, foreshadowing a further slowdown in the labor market even as the headline unemployment rate sits near an all-time low.
Today’s lost pay data is released in advance of Friday’s Bureau of Labor Statistics jobs report and is part of Morning Consult Economic Intelligence, which equips today’s leaders with the high-frequency data needed to get ahead of forecasts; better understand consumer behavior; navigate an increasingly uncertain economy; and make faster, smarter decisions.
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Morning Consult surveys more than 17,000 consumers around the world each day — and conducts an additional 20,000 weekly interviews in the U.S. on lost pay or income — tracking real-time changes in economic sentiment and recession signals, including labor and employment, consumer spending and personal finances, and supply chains and inflation.
This newest data on lost pay highlights how lower-income households bore the brunt of income losses last month: As of the week ending July 23, 13.9% of adults from households earning less than $50,000 reported losing pay in the previous week, up 1.3 percentage points from a series low at the beginning of June. Lost pay has also been concentrated in certain sectors, including leisure & hospitality and construction.
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Despite an uptick in lost pay, U.S. unemployment remains low, which would typically bolster consumer confidence. However, rapidly rising prices and volatile markets have canceled out the feel-good factor of low unemployment, and if declining sentiment results in a pullback of consumer spending, it could prompt further cutbacks by businesses — and ultimately lead to more job losses.
“The U.S. labor market remains strong, but its best days may now be in the rearview mirror,” said John Leer, chief economist at Morning Consult. “With the Fed raising interest rates aggressively to combat high inflation, businesses are slowing hiring and expansion plans, releasing steam from a red-hot labor market. Whether that slowdown is swift and severe enough to tip the economy into a recession remains to be seen.”
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