Over the past quarter, the labor market has continued to evolve in a positive direction for the workers compensation system relative to the tight post-COVID market of a few years ago. We have seen job growth, turnover, and participation moving from the extremes of 2021 to more balanced levels and closer to pre-pandemic (2015–2019) averages. However, the key outstanding question for the industry remains: is the labor market moving softly into balance or are we seeing early signs of deterioration toward recessionary conditions.
In this
Quarterly Economics Briefing (QEB), we will build off last quarter’s analysis of the consumer to help answer that key question. Based on the evolution of the data and the state of household finances broadly across the economy, we continue to see the economy moving toward balance rather than a recession, despite elevated risks.
Key Themes and Takeaways
- The labor market remains robust, characterized by an average of 266,000 net new jobs added over the past three months and strong annual wage growth of 4.2%, supporting premium growth in workers compensation.
- Labor market statistics continue to improve with rising participation and more normalized turnover, taking some pressure off the economic drivers of workers compensation frequency.
- The probability of a recession has diminished over the past quarter as consumer spending remains supported by strong employment levels, real income growth, further capacity for debt, and still-elevated excess savings.
Check out the
full report to learn more.
This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.
