There are lots of jobs being created, but not enough people to fill them. That has been a familiar refrain as the economic recovery keeps going and unemployment keeps falling.
The economy has now been adding jobs for nearly 8 years — its longest streak on record. The U.S. is considered at near full employment, and the biggest challenge in the job market is the lack of available workers — a record 6.7 million jobs remain unfilled. In many industries, including trucking, construction, and information technology, this labor shortage is becoming increasingly acute.
And yet hiring is expected to be strong for June. When the Labor Department’s unemployment reports come out Friday morning, economists estimate it will show about 195,000 jobs were added last month, and that the unemployment rate held at 3.8 percent — its lowest level since 2000.
For workers, a hot job market is a good thing, resulting in what have so far have been modest increases in wages. And companies have been offering more benefits to attract and retain their workers. That trend is likely to continue through 2018, with some economists predicting the jobless rate will keep falling to 3.5 percent by year end. The last time it was that low was in 1969.
For employers, however, a hot job market is costly. It increases pressure to raise wages, and even curb business growth if there are not enough people to do the work.
An ADP/Moody’s Analytics survey out Thursday showed private hiring rose by 177,000 last month, slightly below expectations. “Business’ number one problem is finding qualified workers,” says Moody’s Chief Economist Mark Zandi. The problem, he says, will get worse if hiring continues at its current pace. “These labor shortages will only intensify across all industries and company sizes.”
If hiring continues at its robust pace, the Federal Reserve is likely to raise interest rates two more times this year, as it weighs concerns that the economy could overheat. The Fed has twin goals of controlling inflation while promoting maximum employment.
Analysts are also watching to see whether President Trump, whose office gets a preview of the numbers the day before the release, will tweet information about the report before it is due out from the Labor Department at 8:30 a.m. on Friday.