FLASH: Americans’ confidence in the job market in May hit the highest level in Gallup’s records, which date back to Y 2001.
A recent Gallup poll found the following:
- Overall views of the economy remain positive.
- Over 7 in 10 Americans feel positively about the US job market.
- Employment optimism among workforce is highest since 2000.
- Majorities of Americans rate economy positively and say it’s improving.
The Gallup poll found 71% of respondents in May said now is a good time to find a quality job. This represents a significant improvement from March and April, when 65% each month rated the job market favorably. Today’s level is similar to February’s 69% reading.
The latest survey was conducted 1-12 May, with most of the interviews collected after the 3 May Labor Department report announcing that unemployment in April had fallen to 3.6%, the lowest in nearly 50 years.
Gallup’s national adult trend on this question started in August 2001, when 39% rated the job market favorably.
Meanwhile, Americans’ broader perceptions of the US economy in May are similar to what Gallup has found over much of the past year, including in March and April:
- 51% of Americans rate current economic conditions as excellent or good, essentially unchanged from last month’s 50%.
- 54% of American adults, say economic conditions are getting better. This is up from 49% in April, but nearly identical to February and March.
The longer-term picture shows that Americans’ positive perceptions of both the economy and the job market are substantially improved today over the prior decade, particularly from Y 2008 through Y 2011, as the country was entering and then recovering from the recession and global financial crisis.
Meanwhile, the tight US labor market is not drawing new people into the labor force, but merely reducing the number dropping out, according to research published on Monday by the San Francisco Federal Reserve.
The paper by Regis Barnichon, a research adviser in the San Francisco Fed’s economic research department, contradicts a widely held view among economists that people either returning to or entering the labor market were behind strong monthly job growth despite the lowest unemployment rate in nearly 50 years and anecdotal evidence of worker shortages.
The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, hit a more than 5-year high in January. It has been mostly driven by gains in the 25-55 age group, the prime-aged population, Reuters explained.
“These gains might suggest that the strength of the job market is pulling people from the sidelines into the labor force,” said Mr. Barnichon. “However, analysis that accounts for underlying flows between labor force states shows that, rather than drawing new people in, the hot labor market has instead reduced the number of individuals who are dropping out.”
The economy has created an average of 205,000 per month this year, 2X the roughly 100,000 per month needed to keep up with growth in the working age population. At 3.6%, the unemployment rate is the lowest since December 1969.
The labor force participation rate declined sharply during the Y’s 2007-19 recession and continued to trend lower in the years after. It has, however, been steadily rising since the past year, leading some economists to believe that there is still some slack in the labor market.
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