Honolulu, Hawaii 2022-08-05 11:45:00 –
WASHINGTON >> U.S. employers added a staggering 528,000 jobs last month despite fears of raging inflation and a possible recession, recovering all the positions lost in the coronavirus recession. Did. The unemployment rate has dropped to 3.5%, the lowest level since the pandemic hit in early 2020.
130,000 more jobs were created in July than in June, the most since February.
Amidst growing consensus that the economy is losing momentum, very hot job numbers from the Labor Department were released today. 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.
Today’s surprisingly strong report will no doubt intensify the debate about whether America is in recession.
Fitch Ratings chief economist Brian Coulton wrote after the numbers came out, “Recession – what recession?” “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 in July.
Of course, today’s employment numbers have political implications. Americans are increasingly worried about rising prices and the risk of recession. With President Joe Biden’s Democrats trying to maintain control of Congress, he’s sure to be at the forefront of voters’ minds during the November midterm elections.
Praising today’s resilient labor market, Biden said, “This is the result of my economic planning.”
The president boosted job growth last year through a $1.9 coronavirus relief package and a $1 billion bipartisan infrastructure bill. But Republican lawmakers and some leading economists say this government spending is responsible for the current rate of inflation.
And for millions of Americans, it’s the waning power of paychecks that’s staying front and center.
Hourly wages increased by 0.5% last month and have increased by 5.2% over the past year. That’s not enough to keep up with inflation, which means many Americans, especially the poorest, have to save money in the face of high prices for food, gasoline, and even school supplies.
“There’s still work to be done, but today’s jobs numbers show that we’re making great strides for working families,” Biden said.
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.
The unemployment rate fell as the number of Americans who said they had jobs increased by 179,000 and the number of those who said they were unemployed decreased by 242,000. But 61,000 Americans dropped out of the workforce in July, reducing the percentage of those working or looking for work from 62.2% in June to 62.1% last month.
A strong job market is a good thing, but it also makes it more likely that the Federal Reserve will continue to raise rates to cool the economy.
“The strength of the labor market, already facing Fed rate cuts this year, is a clear signal that the Fed has more to do,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. said. “Overall, today’s report should put the idea of a near-term recession on the back burner for the time being,” he said.
On Wall Street, the S&P 500 fell 0.1% after all but wiped out the selling that began shortly after the Labor Department released its report. Investors appear to be weighing the possibility of the Fed continuing to raise rates aggressively to cool the economy and inflation against the positives of a strong job market.
Attempts to interpret wildly different economic data are taking place on both Wall Street and Main Street.
New Yorker Karen Smalls, 46, began looking for work three weeks ago as a social worker support staff.
“I had no idea how good the job market was right now,” she said shortly after completing her fifth interview this week. The market is great.” The single mother is looking for someone close to her home in Manhattan who pays well and is weighing several offers. She takes care of her two children.
This is a far cry from two years ago, when businesses closed, millions of people stayed home, and the pandemic nearly brought economic life to a halt. In March 2020 and his April, US employers cut her a staggering 22 million jobs and the economy plunged into his two months of deep recession.
But massive government aid and the Fed’s decision to lower interest rates and pump money into the financial markets facilitated a remarkably quick recovery. Caught off guard by the momentum of the recovery, factories, shops, ports and freight yards were overwhelmed with orders, rushing to reinstate workers laid off due to COVID-19.
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.
In a report full of mostly good news, the Labor Department noted that 3.9 million people were working part-time for economic reasons in July, up 303,000 from June. According to labor economists, it “reflects an increase in the number of people who have had their hours cut due to slackness in business situations”.
Some employers are also reporting signs of a looser job market.
Aaron Sanandres, CEO and co-founder of Untuckit, an online clothing company with nearly 90 stores, said in the past few weeks he’s had a little more time to fill a job at his New York headquarters and a part-time job in a store. I noticed it got easier. For example, Sanandres says his company was able to hire two people in e-commerce in less than a month. It used to take twice as long.
“We have a lot of candidates,” added Sanandres. He also said the labor market is loose for engineers, possibly as a result of layoffs at tech companies. Untuckit, like many retailers, has lost a significant portion of its hourly workers to more flexible gig jobs. Sanandres said the company is still grappling with that competition, but it’s getting easier.
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.
Despite some tightening in the labor market in some sectors, today’s jobs data clearly shows that the US job market is surprisingly strong.
Nick Bunker, Head of Economic Research at Indeed Hiring Lab, said: “Yes, production growth may slow and the economic outlook is clouded. But employers are still tough to hire more workers. It may fade, but it’s still bright red.”
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%