Low Unemployment Emboldens Job Seekers, Could Worry Investors

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Photo Credit: Charles Krupa/AP/REX/Shutterstock
June 1, 2018
Updated 5mo ago

By Michael Teich

It's a good time to be looking for a job, said Glassdoor's chief economist Andrew Chamberlain, as unemployment fell to 3.8 percent, its lowest level in 18 years.

"These very tight labor markets are putting you in a strong bargaining position with employers," Chamberlain said in an interview Friday with Cheddar after the May jobs report was released.

The economy added 223,000 last month, more than the expected 188,000. And with so many people working, and employers still looking to fill positions, those available workers are in high demand, Chamberlain said.

Investors also applauded the jobs growth Friday, as stocks rallied, but Chamberlain said he was skeptical the news was positive for equities.

“For investors, it raises question marks,” he said, adding that he was, "quite surprised by stock market response." He said growing wage pressure and continued strength in the labor market could mean employers would have to raise wages for low skilled jobs, and it may encourage the Federal Reserve to raise interest rates in the coming months.

Despite a strong labor market, Chamberlain said there are risks of a recession. He said that the number-one danger to the economy was trade, and a possible multi-front trade war, because "about a quarter of the U.S. economy is dependent on trade." And he cited oil prices, too, among his concerns.

“If that hits $100 a barrel, that raises the cost of everything we are buying in the e-commerce world," he said. "Every delivery truck gets more expensive to run, and that will work to put the brakes on the economy."

For full interview, click here.