What Is the Job Market?
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 referred to as the labor market.
The job market can grow or shrink depending on the labor demand and supply within the overall economy, specific industries, for specific education levels or specific job functions. It is a major component of any economy and is directly tied in with the market for goods and services.
The Job Market and the Unemployment Rate
The job market is directly related to the unemployment rate. 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. As the unemployment rate drops employers are forced to compete more heavily for available workers, which 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 upon the health of the overall economy.
During difficult economic times, unemployment tends to rise. High rates of unemployment can prolong economic stagnation and contribute to social upheaval, leading to the loss of opportunities for many individuals to live comfortably.
The state of the job market can be measured by something called the Current Population Survey. It's a statistical survey that is performed on a monthly basis by the U.S. Bureau of Labor Statistics. The survey includes a representative sample of about 60,000 homes to try and determine the unemployment rate of certain regions, earnings of those who are surveyed, hours the respondents worked and a number of other demographic factors.