The labor market is still looking resilient — and other happenings in the world of work

Welcome back to The Work Shift, a weekly newsletter that keeps you informed about the economy, labor market and evolving world of work through data-driven insights. Click subscribe to be notified of future editions.

Catch up on the headlines from the last 7 days.

• The U.S. economy added more jobs than expected last month, undermining hopes for lower interest rates. Read more about this below.

• Consumer spending is waning, recent data shows. Disposable income growth has moderated in 2024 and the savings rate hit a 16-month low as many Americans are depleting the funds they amassed during the pandemic, resulting in rising credit card usage. Higher-for-longer interest rates are further dampening demand for big ticket items and in the housing market.

• College students are heading south. Many have been eyeing moves to the Sun Belt in search of warmer weather and lower taxes, and younger Americans are following suit. Applications to Southern universities are up 50% since 2019, while universities in New England and the Mid-Atlantic have seen a less-than-30% increase in applications. Lower tuition prices drive the trend.

• Hybrid work is as valuable as a raise. New Stanford research shows that more flexible working arrangements have led to higher employee satisfaction and less turnover. What’s more? Survey data shows that workers view the perk of hybrid work as akin to an 8% raise.

• The restaurant industry is set to see a record year, with sales projected to hit $1.1 trillion by the end of December, according to the National Restaurant Association. This would mark a definitive rebound from the devastation caused by the pandemic and higher costs for labor, food and technology. At the same time, diners are eating at lower-priced restaurants and ordering value meals in response to inflation.

Take a closer look at recent trending topics — and engage with meaningful conversations happening on LinkedIn.

Payrolls popped in May

• In a sign of a still resilient labor market, the U.S. economy added 272,000 jobs in May, far more than expected, the Bureau of Labor Statistics reported Friday. However, the unemployment rate ticked up to 4.0%, its highest level in two years. Job growth had been undershooting the monthly average seen in the first quarter, with a revised 165,000 new nonfarm payrolls in April. 

• A tighter labor market and its contribution to inflationary pressures may undermine the case for interest-rate cuts anytime soon. “The Federal Reserve interest rate policy has recently proved to be quite insensitive to a strong labor market. Meaning that strong job growth and a strong economy in and of themselves are not a reason to cut rates,” economist Elizabeth Crofoot explained. “Rather, the Fed will be looking for clear signs of stubbornly high inflation and/or labor market weakness before changing their interest rate policy.”

• The Fed next meets to set interest rates on Wednesday, following the release of new inflation data, and is expected to hold its key rate steady at a 23-year high. Traders have also raised bets that the Federal Reserve will hold rates steady into the fall, even after the European Central Bank and the Bank of Canada began trimming theirs last week.

Workers at larger companies could be more burnt out

• Four in ten workers in the U.S. report feeling stuck and burnt out on the job. What’s more? LinkedIn’s latest Workforce Confidence survey shows that figure increases with company size.

• Some 36% of workers at smaller companies (fewer than 200 employees) and 42% of those at mid-market firms (201-1,000 employees) report feeling stuck in their jobs, compared to 46% of their peers at larger enterprises (1,000+ employees). Meanwhile, nearly half of employees at large companies report feeling burnt out (47%), and for smaller organizations, the burnout rate is closer to the U.S. average (41%). 

• “There is a lot of unnecessary work performed in large corporations, lots of bureaucracy, excessive data analysis, programs rolled out that do not have tangible business impact,” human resources professional Claudio Vespucci commented. Eliminating extraneous work, he continued, could go a long way in preventing burnout at large corporations. To do so, “each employee and leader in an organization should ask themselves how certain actions will help the company acquire or delight customers,” he suggested. If the ultimate impact is indirect, skip the action.

'Super commuting' is on the rise

• Commutes are getting longer, but less frequent. New research from Stanford shows the share of super commuters — or those traveling further than 75 miles to work — have grown more than other types of commuters, and are up by nearly a third since 2020. 

• Surging housing costs and the pandemic-prompted rise of remote work, coupled with the staying power of hybrid work, prompted many to move away from city centers. The cities with the largest increases in long commutes include Washington, D.C., New York City, Phoenix and Dallas. 

• At the same time, GPS data shows these commutes are getting easier. Stanford economist Nick Bloom noted that “traffic speeds are about 10% faster as more working from home means less congestion.” The average speed pre-pandemic was 27.3 miles per hour — now that figure is closer to 29.5 miles per hour. “This benefits everyone, even those who do not work from home,” he continued.

Get ready for the week by seeing what’s coming up.

Wednesday, June 12:

• The Bureau of Labor Statistics will release the monthly Consumer Price Index for May, which measures inflation through the price of goods and services.

• The Federal Reserve Open Market Committee will meet to set interest rates.

Thursday, June 13:

• The U.S. Department of Labor will release initial jobless claims for the previous week. The report, a proxy for layoffs, tracks the number of people filing for unemployment benefits.

• The Bureau of Labor Statistics will release the Producer Price Index for May. The gauge measures the change over time in prices charged by domestic producers for their output. 

Friday, June 14:

• The University of Michigan will release its preliminary reading of its monthly Consumer Sentiment Index, which measures how Americans feel about current and future economic conditions.