Welcome to the Labor Markets Center Newsletter! You are receiving this based on your past engagement on this topic via The Conference Board.
2018 is shaping up as a good year for global and US economies, notwithstanding the tightening labor market in the US. General forecast for the United States:
- 2017’s second-half momentum is likely to continue and perhaps strengthen in early 2018.
- Tax cuts passed by Congress will provide an additional boost to the US economy in 2018.
- We project GDP to rise by 2.9 percent in 2018 compared to 2.3 percent for 2017.
The GDP rise is especially significant. In an era where the trend of GDP growth is about two percent, any rate close to three percent is unusually strong.
The US labor market will tighten even more, thanks to these factors:
- Employment growth. Employment will grow much faster than the rate needed to continue tightening the labor market. When so many baby boomers are retiring, even modest employment growth is enough to tighten the market.
- Economic growth. We expect the US economy to grow more than twice the rate needed to tighten the labor market.
By early 2019, the unemployment rate is likely to be at its lowest since the 1960’s. Many industries and locations will suffer from acute labor shortages. While this is likely to improve job satisfaction for workers, it is also likely to hurt the bottom line of many businesses.
Nonetheless, our general optimism persists. Our forecast for global growth in 2018 will be revised up if the economy grows as we expect.