Tight US job market will only suffer a mild downturn

Significance

The US economy faces a period of slow growth and possibly a short and shallow recession, but this is unlikely to cause a significant weakening of labour markets.

Impacts

• Downside economic risks, such as a political failure to raise the ‘debt ceiling’, also hang over labour markets.
• More immigration would ease labour shortages, especially in in-person services, but policy reform faces severe political headwinds.
• Manufacturing jobs have increased by 750,000 during Biden’s term, back to 2008 levels and two-thirds of their 1979 peak.