Labor Market Cooling Ahead of Midterms Raises Affordability Concerns

The US labor market is showing signs of cooling ahead of the midterm elections in November. The unemployment rate remains relatively low at 4.1%, but hiring has slowed down, and Americans are concerned about the cost of living.

In July, nonfarm payroll employment declined by 23,000 jobs, which doesn't look like a traditional jobs crisis. However, the labor market isn't necessarily collapsing either; employers seem to be hiring more cautiously.

Looking at previous midterm election years, the current unemployment rate is closer to the strong labor markets of 2018 and 2022 than the jobs crisis of 2010. But there's a key difference: hiring today is less robust.