current
Easing Labor Market Pressures
Labor markets are showing signs of easing, with declining job vacancies, moderating labor shortages, and rising labor supply in several countries.
Timeframe
near-term
Categories
Impact areas
Detailed Analysis
The report observes a continued loosening of labor markets, evidenced by falling job vacancies and moderating labor shortages. Rising labor supply, often driven by stronger immigration flows, has also contributed to this trend. While nominal wage growth remains high in some countries, it is moderating overall, and growth in unit labor costs has generally eased. These developments suggest a shift towards a more balanced labor market dynamic.
Context Signals
Declining job vacancies and moderating labor shortages
Role of immigration in increasing labor supply
Moderating nominal wage growth and unit labor costs
Edge
Potential for easing labor market pressures to contribute to further disinflation, allowing for a faster pace of monetary policy easing.
Risk of a sharper-than-expected economic slowdown if labor markets cool too rapidly.
Need for policies to support workers affected by labor market transitions and to address skills mismatches.
