The Labor Market Hasn’t Seen a Hot Streak Like This Since The ’60s. Can It Last?

U.S. workers are in the midst of one of the best job markets in history. They haven’t had this much job security since the 1960s, and haven’t seen a longer stretch of low unemployment since the early 1950s, according to data from the Bureau of Labor Statistics. High demand for workers since the economy began to recover from the pandemic has kept widespread layoffs at bay since 2022. 

That streak is at risk of coming to an end Friday when the bureau releases its data for employment in May. Employers have been pulling back job openings, suggesting that a rise in unemployment could be around the corner. However, forecasters expect the rate to hold steady at 3.9%. 

In fact, as the job market is starting to look more like it did in the 1950s, some economists are turning to that decade as a good comparison to understand the economy overall. The 50s may prove to be a better benchmark for the current era than the “stagflation”-stifled 1970s which was brought to mind during the burst of inflation that flared up in 2021. 

“Over the last two years, our current period has been compared to the 1970s, the late 1960s, and more recently the mid to late 1990s given the tech euphoria,” Jim Reid, research strategist at Deutsche Bank, wrote in a commentary. “However, there are also emerging similarities to the early 1950s with unemployment ultra-low, productivity rising, risk markets strong, inflation declining rapidly but with elevated geopolitical risks.”