The labour market recovery from the COVID‑19 recession has been strong, but lost momentum in 2022 and early 2023 in the context of the economic slowdown. However, employment and unemployment have held their ground, and job vacancy rates remain high in most countries, despite some signs of easing. By May 2023, the OECD unemployment rate had fallen to 4.8%, a level not seen in decades.
In the United States, strong labour demand has persisted despite the economic slowdown. The unemployment rate fell to 3.4% in January 2023 before rising slightly to 3.6% in June 2023. Concerns over labour supply, which dipped during the pandemic, have been alleviated as well. Recent trends indicate that labour force participation for persons aged 15‑64 is slightly above its pre‑pandemic level at 74.7% as of June 2023 (from 74.4% in December 2019). Buoyant job openings have also moderated in past months, signaling better alignment between labour demand and supply.
To attract the best talent, employers increasingly offer discretionary benefits. Between December 2019 and December 2022, US online job advertisements contained increased mentions of health-related benefits, retirement schemes (e.g. 401(k) retirement accounts), paid time off and tuition assistance. Such increases were not unique to industries that tend to offer high-paying jobs, such as finance and insurance, but were also seen in industries that tend to offer low-paying jobs, such as accommodation and food services and administrative and support services.
Real GDP growth in the United States is projected to slow as monetary policy further tightens in response to inflationary pressures. As demand slows, employment is expected to fall and the unemployment rate is projected to gradually rise to 4.5% by Q4 2024 (OECD Economic Outlook 2023).
In recent labour market policy developments, the Inflation Reduction Act (IRA) of 2022 increased public expenditure for state‑based programs to train and educate workers spcialised in energy efficiency. Included in the IRA is over USD 200 million in state grants to fund training programs for the installation energy efficiency enhancements and conducting energy audits in commercial and residential buildings.