The job market is the market in which employers search for employees and employees search for jobs. The job market is not a physical place as much as a concept demonstrating the competition and interplay
between different labor forces. It is also known as the labor market.
The job market can grow or shrink depending on the demand for labor and the available supply of workers within the overall economy. The job market is a significant component of any economy and is directly tied in with the demand for goods and
services. According to the U.S. Department of Labor, Bureau of Labor Statistics total employment for non-farm payrolls rose by 528,000 for July 2022, and the unemployment rate (a lagging indicator) fell to 3.5%. Industries such as leisure and hospitality,
professional and business services, and health care all saw job gains during this time.
The job market is also directly related to the unemployment rate. The unemployment rate is the percentage of people in the labor force who are not currently employed but actively seeking a job. The higher the unemployment rate, the greater the supply of
labor in the overall job market. When employers have a larger pool of applicants to choose from, they can be pickier or force down wages. Conversely, as the unemployment rate drops, employers are forced to compete more heavily for available workers. The competition
for workers has the effect of increasing wages. Wages determined by the job market provide valuable information for economic analysts and those who set public policy based on the state of the overall economy.