U.S. employers add 528,000 jobs; unemployment falls to 3.5% – Denver, Colorado
Denver, Colorado 2022-08-05 09:24:02 –
WASHINGTON — Defying fears of a possible recession and rampant inflation, American employers added a staggering 528,000 jobs last month, restoring all the jobs lost in the coronavirus recession. The rate dropped to 3.5%, the lowest since the pandemic began in early 2020.
Job creation in July increased from 398,000 in June, the highest since February.
Burning job numbers from the Labor Department were released on Friday amid growing consensus that the US economy is losing momentum. The US economy contracted in his first two quarters of 2022. This is the informal definition of recession. But most economists believe a strong job market is keeping the economy from slipping into recession.
This surprisingly strong employment number will undoubtedly intensify the debate over whether the US is in recession.
“Recession – what recession?” Fitch Ratings chief economist Brian Coulton wrote after the numbers came out. “The U.S. economy is creating 6 million new jobs a year, which is three times as fast as he normally sees in a good year.”
Economists had expected only 250,000 new jobs this month.
The Labor Department also revised its employment figures for May and June, saying an additional 28,000 jobs were created in those months.Job growth last month was particularly strong in the healthcare industry and hotels and restaurants.
Hourly wages rose 0.5% last month, up 5.2% over the past year, but still not enough to keep up with inflation.
Strong job numbers could push the Federal Reserve (Fed) to keep raising rates to cool the economy and fight resurgent inflation.
Of course, Friday’s numbers have political implications. Voters worry about rising prices and the risk of a recession ahead of November’s midterm elections as President Joe Biden’s Democrats seek to maintain control of Congress. The unexpectedly high hiring numbers will be welcomed by the White House.
The economic background was problematic. Gross domestic product, the broadest measure of economic output, fell in both the first and second quarters. A consecutive GDP decline is one definition of a recession. And inflation is raging at his 40-year high.
The current resilience of the labor market, especially the low unemployment rate, is the main reason most economists believe the recession has not yet begun, but growing fears that one is approaching. increase.
The recession is not just an American problem.
In the UK, the Bank of England forecast Thursday that the world’s fifth-largest economy will slip into recession by the end of the year.
Russia’s war in Ukraine darkens the outlook for Europe as a whole. Conflict has led to shortages of energy supplies and rising prices. European nations are bracing for the possibility that Moscow will reduce, and possibly completely cut off, the flow of natural gas, which is used to power factories, generate electricity and heat homes in the winter.
Ration may be required by industry if Europeans cannot store enough gas for the colder months.
Since the outbreak of COVID-19 in early 2020, the economy has been out of control.
The pandemic has nearly brought economic life to a halt as businesses closed and consumers stayed home. In March 2020 and his April, U.S. employers cut his staggering 22 million jobs and the economy plunged into his two months of deep recession.
However, huge amounts of government aid and the Fed’s decision to cut interest rates and pump money into the financial markets facilitated a remarkably quick recovery. Caught off guard by the strength of the rebound, factories, shops, ports and freight yards were overwhelmed with orders, rushing to reinstate workers furloughed when COVID struck.
The result is shortages of workers and supplies, delays in shipments and rising prices. In the United States, inflation has risen steadily for over a year. Consumer prices rose 9.1% year-on-year in June, the biggest increase since 1981.
The Federal Reserve had underestimated the recovery in inflation, believing prices were rising due to temporary supply chain bottlenecks. Since then, we have acknowledged that the current rate of inflation is not “temporary” as it was once referred to.
Central banks are now responding aggressively. He has raised the benchmark short-term rate four times this year, with more hikes on the horizon.
Rising borrowing costs are hurting. Rising mortgage rates, for example, have cooled a red-hot housing market. Sales of previously occupied homes fell in June for the fifth straight month.
Real estate firms, including lender Loan Depot and online home broker Redfin, have begun furloughing workers.
The labor market shows other signs of volatility.
The Labor Department reported Tuesday that employers posted 10.7 million job openings in June. That’s a healthy number, but it’s the lowest since September.
And while the four-week average number of Americans signing up for unemployment benefits (a layoff proxy that smoothes out weekly fluctuations) rose to its highest level since November last week, that number is seasonal. may have been exaggerated by
U.S. employers add 528,000 jobs; unemployment falls to 3.5% Source link U.S. employers add 528,000 jobs; unemployment falls to 3.5%
