Evelyn Reynolds

A New York Fed survey released Monday showed that of those who were employed at the time of the last survey in March, 88% still had jobs, the lowest in data going back to 2014.
Those who expected to become unemployed rose to 4.4%, a 0.5 percentage point increase from a year ago and the highest in the survey’s history.

Job seekers attends the JobNewsUSA.com South Florida Job Fair held at the Amerant Bank Arena on June 26, 2024 in Sunrise, Florida. 
Joe Raedle | Getty Images

In another sign of cracks forming in the U.S. labor market, a New York Federal Reserve survey Monday showed a slide in people reporting they are employed, a surge in those looking for work and growing dissatisfaction with pay.
The thrice-yearly measure of labor activity, confidence and satisfaction reflected growing concern in July about job security and an increase in those expecting to work past typical retirement age. Workers are still looking for higher starting salaries but are getting lower offers.

The results come with the unemployment rate ticking higher and Wall Street and Fed policymakers watching the developments closely for clues about where things are headed for the U.S. economy.
Among the findings was that, of those who were employed at the time of the last survey in March, 88% still had jobs, the lowest in data that goes back to 2014. Similarly, those who expected to become unemployed rose to 4.4%, a 0.5 percentage point increase from a year ago and the highest in the survey’s history.
Moreover, the level of those searching for a new job in the previous four weeks popped to 28.4%, up 9 percentage points from a year ago and another historic high going back to March 2014.
On wages, satisfaction with current compensation dropped to 56.7%, down more than 3 percentage points from the same period in 2023. Satisfaction with benefits tumbled to 56.3%, off more than 8 points from a year ago, while satisfaction with opportunities for promotion slid to 44.2%, down from 53.5% last year, and was most pronounced among women, those without a college degree and respondents with household incomes less than $60,000.
The typical wage offering for full-time jobs in the past four months declined slightly to $68,905 while the average “reservation wage,” or the minimum level workers would accept for a new job rose to $81,147, up about $2,500 from a year ago but fractionally below the record high in the last survey.

Finally, the expected likelihood of working past age 62 nudged up to 48.3% of respondents and increased to 34.2% of those saying they expect to work past 67, an increase of more than 2 percentage points.
While the unemployment rate of 4.3% would be considered low by historical standards, it has been on the rise lately and spurring fears of a broader erosion in the economy. July saw a gain of just 114,000 in nonfarm payrolls, so the August report, to be released in early September, will be closely watched.
Following their most recent meeting, Fed officials described job growth as having “moderated.” The central bank is widely expected to reduce its key borrowing rate by a quarter percentage point at its next meeting in September, the first move lower in more than four years.

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Goldman Sachs has cut its probability forecast for a U.S. recession to 20% from 25%, shortly after raising it from 15%.
After holding the odds at 15% for nearly a year, economists at Goldman — and elsewhere — were spooked by a weaker-than-expected July jobs report.
However, retail sales and jobless claims readings since then have signficantly eased concerns the world’s biggest economy is heading for a recession or is already in one.

Goldman Sachs has cut its probability forecast for a U.S. recession to 20% shortly after raising it, as fresh labor market data sparked a reassessment of market views on the economy.
Economists at Goldman earlier this month raised their 12-month U.S. recession probability from 15% to 25% after the U.S. July jobs report of Aug. 2 showed nonfarm payrolls grew by a less-than-expected 114,000. That was down from the downwardly revised 179,000 of June and below the Dow Jones estimate of 185,000. 

The report triggered widespread concerns about the world’s largest economy, and contributed to the sharp — but ultimately brief — stock market sell-off at the start of the month.
It also triggered the “Sahm rule,” a historical indicator showing that the initial phase of a recession has begun when the three-month moving average of the U.S. unemployment rate is at least half a percentage point higher than the 12-month low.
Goldman initially cited this as a reason for hiking the probability of an economic downturn — but changed tack on Saturday, when it wrote in a note that it saw the odds down to 20% because data released since Aug. 2 showed “no sign of a recession.”

That included retail sales for July — which rose by 1%, versus an estimate of 0.3% — and weekly unemployment benefit claims, which were lower than expected.
The figures prompted a change in mood which was reflected in a rally in global stocks late last week.

“Continued expansion would make the US look more similar to other G10 economies, where the Sahm rule has held less than 70% of the time,” Goldman economists said Saturday, noting that several smaller economies, including Canada, had seen sizeable unemployment rate increases in the current cycle without entering a recession.
Claudia Sahm, chief economist at New Century Advisors and inventor of the rule, told CNBC that she did not believe the U.S. was currently in a recession, but that further weakening in the labor market could push it into one.
A healthy jobs report on Sept. 6 would “probably” spur Goldman to cut its recession probability back to 15%, where it had been for nearly a year before August, the bank’s economists said.
Unless another downside surprise in the jobs report takes place, Goldman will become more confident in its forecast for a 25-basis-point rate cut at the Federal Reserve’s September meeting, rather than a steeper 50-basis-point trim, they added.
Markets have fully priced in a Fed rate cut in September, but have slashed the odds of a 50-basis-point reduction to just 28.5%, according to CME’s FedWatch tool.
Rashmi Garg, senior portfolio manager at Al Dhabi Capital, told CNBC’s “Capital Connection” on Monday she expected a cut of 25 basis points “unless we see a sizeable deterioration in the labor market in the September 6 jobs report.”
— CNBC’s Sam Meredith contributed to this story. More

Luke Sharrett/Bloomberg via Getty Images

Egg prices are climbing, placing the household staple back in the spotlight as consumers stay concerned not only about inflation but the absolute level of prices.
July marked a third straight month that egg prices rose on an annual basis, a reversal from a year of relative decreases. The culprit was a continued battle against the highly pathogenic avian influenza, known in short as HPAI or the bird flu.

Prices for the vital food ingredient soared 19.1% in July compared with the same month a year prior, according to consumer price index, or CPI, data released this week. By comparison, the entire CPI basket of items rose just 2.9% over the same period.

Inflation in egg prices became a focus for consumers during the pandemic given their ubiquity in everyday cooking. Increases in eggs and other groceries have been top of mind for consumers grappling with higher costs, in turn hurting consumer sentiment in recent years.
But the latest inflationary wave appears more connected to a spike of nearly 8% from March to April, which can be tied to seasonal patterns in the bird flu. That was largest month-over-month increase since the spring of 2023.
“The short answer, we think, is related to avian influenza,” said Caitlinn Hubbell, market research analyst at Purdue University’s Center for Food Demand Analysis and Sustainability in West Lafayette, Indiana. “As unfortunate as that is, the high-path avian influenza has continued to be around.”

The bird flu had a historic outbreak in 2022 and surged once again at the end of 2023. More recently, Hubbell said resurgences in Colorado and California have hurt supplies.

Egg demand is considered “inelastic,” Hubbell said, meaning consumers will usually buy the same amount regardless of price increases. On the flip side, she noted that consumers usually won’t stock up when they see lower costs.
Inelastic items tend to see big price changes from even small changes in supply, she said. That can underscore the impact of any bird flu outbreaks on the prices customers see on grocery store shelves.

For shoppers, this has resulted in higher prices. The average rate for a dozen large, Grade A eggs topped $3 in July for the first time in more than a year, according to the Bureau of Labor Statistics.
Despite this reacceleration, prices are still more than 20% below levels seen last year. Nonetheless, the price of eggs tracked within the CPI basket is up about 42% compared with July 2021.

Looking ahead, Hubbell said price movements will hinge on the state of the bird flu. But she’s hopeful consumers can see some relief with upcoming seasons less likely to bring outbreaks.
“It’s hard to tell,” Hubbell said. “It all depends on the impact in the size and scope of HPAI.” More