Is The Job Market Hot For Wrong Reason? US Workers Are Less Productive


By Panos Mourdoukoutas Ph.D., International Business Times



The hot U.S. labor market has been the bright spot of a cooling economy in recent months. Employers keep hiring more people, as evidenced by robust payroll reports.


For instance, payrolls rose by 315,000 in August and 5.8 million for the past 12 months. And that brings overall employment now standing 240,000 higher than its pre-pandemic level in February 2020.


Strong payrolls have resulted in fewer jobless claims, which now stand at 215,000, according to a Department of Labor report released this morning. Meanwhile, unemployment—the percentage of the labor force without a job looking for work— hovers at multi-year low levels, even as the nation's output, measured by GDP, has declined for two consecutive quarters—a situation which some observers would call a recession.


"The U.S. is in a period of historic levels of inflation, a technical recession with two-quarters of negative GDP growth, and yet there is a very tight labor market," Michael Gibbs, CEO of Go Cloud Careers, told International Business Times in an email.


So, what's behind this disconnect between the labor market and the rest of the economy? A couple of factors.




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