The rise in US wages has moved from a market mechanism created by job changes to a stage where it is necessary to leverage strikes

The US employment statistics (August) confirm the easing of supply and demand in the labor market. The unemployment rate was 3.8%, up from the previous month (3.5%). However, it is within the range (3.4-3.8%) since breaking 4% in 2022. A year ago, it was 3.7%. The number of people employed in the non-farm sector is 187 thousand. This is also a mediocre number. With a workforce of 167 million people, that's not dramatic. The average hourly wage increased by 4.3%, and the average weekly wage increased by 4%, as expected.

What has changed is the labor participation rate and the number of unemployed people. The labor participation rate was 62.8%, which was higher and more significant than a year ago (62.3%) than the previous month (62.6%). Students who have stopped paying student loans may have filled the hole of early retirement for the elderly by starting to work. The number of unemployed people was 6.35 million, which is higher than the previous month (5.84 million) than a year ago (6.02 million). Clearly, the fact that there were over 6 million unemployed people is evidence of an easing in labor supply and demand.

It is important to compare this figure with the number of job offers in the JOLTS recruitment labor transfer survey conducted by the Bureau of Labor Statistics, which is a leading indicator. The number of job offers in July was 8.82 million, down 500,000 from the previous month. If the number of job offers continues to decline at the same pace, the micro labor supply-demand balance will also be close. According to the Atlanta Federal Bank's wage growth tracker (July), the difference in the wage increase rate between job changers and those enrolled is 1%, which is a significant drop from the peak of 2.8% in August last year.

Considering the frequency of recent strikes, it is certain that wage increases in the United States have gone from being based on market mechanisms due to job changes to a stage where the rise cannot be maintained without leverage due to strikes.