Warning signs in the U.S. job market! 14 states have more unemployed people than job vacancies, reaching a 14-year high

According to media reports, based on the analysis of data released by the U.S. Bureau of Labor Statistics (BLS) on Wednesday, as of February, 14 states in the U.S. have seen unemployment numbers exceed job vacancies, marking the highest record since April 2021.

The data shows that in February, Kentucky, New York, Ohio, and Rhode Island joined this group. Analysts believe this indicates that the job market is becoming increasingly severe.

Between November 2022 and April 2023—when the U.S. economy was experiencing strong post-pandemic recovery—the unemployment-to-job vacancy ratio was below 1 in all 50 states. In other words, theoretically, the number of jobs at that time was sufficient to provide employment for all unemployed individuals.

In May 2023, California and New Jersey became the first states where this ratio exceeded 1. As of February of this year (the latest data month), California has the highest unemployment-to-job vacancy ratio, with approximately 150 unemployed individuals for every 100 job vacancies.

The state with the lowest ratio is South Dakota, with only about 40 unemployed individuals for every 100 job vacancies.

Powell: The strength of the labor market depends on price stability

Federal Reserve Chairman Jerome Powell stated in a speech on Wednesday that although the economic growth outlook may be slowing, the current U.S. labor market remains robust.

He pointed out that while job growth has slowed compared to last year, the unemployment rate is still "in a very good position." Wage growth, although moderating, continues to outpace inflation.

"Overall, the labor market is solid, essentially in a balanced state, and is not a major source of inflationary pressure."

However, Powell warned that in the wake of the impacts from the trade war initiated by Trump, the Federal Reserve may lack the flexibility to respond quickly to an economic downturn; he "highly likely" believes that tariffs will lead to higher prices for consumers and higher unemployment rates in the short term.

He noted that this would present a "challenging situation" for the Federal Reserve, as addressing inflationary pressures through interest rate policy or tackling unemployment issues could exacerbate another problem.

Powell also hinted that when the two policy objectives conflict, the Federal Reserve may prioritize controlling inflation. He stated that the Fed will strive to balance maximum employment and price stability,

"But keep in mind that without price stability, we cannot achieve long-term strong labor market conditions that benefit all Americans."

Nick Timiraos, a senior reporter known as the "new Fed whisperer," commented that as a result, the Federal Reserve may delay interest rate cuts until it sees an increase in the unemployment rate. This is because cutting rates would stimulate interest-sensitive consumer demand, and the Fed may be reluctant to ease policy while inflationary pressures remain.

Faced with an uncertain economic outlook and the impacts of fluctuating tariff policies, Powell quoted the character Ferris Bueller from the 1980s American comedy film Ferris Bueller's Day Off: "Life moves pretty fast." We are fully capable of waiting until the situation becomes clearer, and then consider adjusting our policy stance