US labour market
Headline inflation rose to a new 40-year high this week, with the Consumer Price Index hitting 9.1% for June. This will put even more pressure on the Federal Reserve to go big on rate rises, hiking by 75bps or even more this month. This, in turn, will drive up unemployment – but as our first chart shows, the Fed still has a bit of wiggle room.
While the US labour market has made a spectacular recovery after losing more than 20 million jobs in April 2020, employment remains below the pre-pandemic trend: about 3 million women and more than one million men are still missing from the labour force.