Nationwide job market showing signs of a shift in power balance between workers and employers
Union strikes from Detroit to Hollywood have proved the power of workers and changed the tide after decades of a weakened labor movement. However, the nationwide job market is showing signs that the post-pandemic era of worker control over wage growth and job opportunities is coming to an end.
According to a survey by CNBC, 60% of chief financial officers (CFOs) say that it has become easier to find and hire qualified workers compared to a year ago, marking a significant 25-percentage point increase from just a quarter ago. The survey also indicates that a shift is underway in the balance of power between workers and employers, with job growth and wage growth declining.
The survey’s findings also suggest that CFOs are more optimistic about the market and the likelihood of a soft landing. For example, over 40% of CFOs say it’s more likely that the Dow Jones Industrial Average will reach 40,000 than fall back below 30,000. In addition, 37% of respondents expect a soft landing for the economy, while half of CFOs expect a recession next year.
Despite the Federal Reserve’s battle against inflation, expectations for higher inflation have been rising among consumers. This indicates that even though the Fed is winning the battle, it’s a long way to total surrender. CFOs expect that inflation will not return to the Fed’s 2% target until 2025 or later.
The shifting power balance between workers and employers is a key factor influencing the broader view of the economy and markets, as indicated by the survey. Most CFOs do not expect rate cuts to start until September of 2024, with 30% of CFOs saying it will be 2025 before the Fed cuts, which is more hawkish than the market’s expectations.
