‘What recession?’: U.S. employers add 528,000 jobs in July

WASHINGTON

U.S. employers added 528,000 jobs last month, despite warning signs of economic decline. This helped to ease fears of a recession, and gave President Joe Biden some good news going into the midterm elections.

Unemployment fell another notch to 3.6% from 3.5%, matching the record low of more than 50 years just before the pandemic.

Since March 2019 and April 2020, when COVID-19 decimated the U.S. economy, 22 million jobs have been restored to the economy.

The Labor Department’s Friday report of record-breaking numbers will only intensify the debate about whether the U.S. is currently in recession.

“Recession — what is it?” Brian Coulton, chief economist of Fitch Ratings, wrote the following: “The U.S. Economy is creating new jobs at an average annual rate of 6,000,000 — that’s three-times faster than what we usually see in good years.”

Economists predicted only 250,000 jobs last month, which is a decline from June’s revised 389,000. July turned out to be the most successful month since February.

In a time of economic anxiety, the Democrats and Biden welcome the strong figures.

Inflation has reached its highest point in over 40-years. The economy contracted for two quarters straight, which is the most common, informal definition of a slump. However, it does not consider a variety of other factors economists consider like the job outlook.

Biden acknowledged that inflation was causing pain at the White House and credited his policies for the increase in job growth. He highlighted the 642,000 new manufacturing jobs created during his tenure.

“Instead workers asking for work, we are seeing employers compete for American workers,” said the president. said.

Biden’s $1 trillion bipartisan legislation and $1.9 trillion coronavirus relief plan have helped to boost job growth. However, some economists and Republican lawmakers claim that the spending of the administration has led to high inflation.

In recent weeks, the president received good economic news as gasoline prices have fallen steadily after hovering around $5 per gallon in June.

Wall Street stocks fell after the release of the employment report. A strong job market is good, but it makes it more likely the Federal Reserve will increase interest rates to cool down the economy.

“The Fed has more work ahead of it, as evident by the strength and resilience of the labor market despite… rate-tightening by this Fed year.” said Charlie Ripley is senior investment strategist at Allianz Investment Management. “Overall, today’s report should put the notion of a near-term recession on the back burner for now.ΓÇ│

The Labor Department reported that hourly wages increased by 5.2% and a healthy 0.5% last month. This isn’t enough to keep up inflation. Many Americans are forced to make sacrifices to buy groceries, gasoline and school supplies.

Last month saw strong job growth in the hotel and restaurant industries, as well as in the health care sector.

American workers said that they had more jobs than they did in June, and the number of people who were not employed fell by 242,000. However, 61,000 Americans left the workforce in July. This lowered the percentage of people looking for work or working to 62.1% in comparison to June’s 62.2%.

Karen Smalls (46), a New Yorker, began searching for work three weeks back as a member the support staff of social workers.

She stated, “I didn’t know how good the job marketplace is right now.” said After finishing her fifth interview, she was done. “You see all these negative reports in the news, but the job market is incredible right now,” she said.

As a single mother, she’s weighing the offers and looking for one that will allow her to take care of her children.

The pandemic of 2008 brought economic collapse to the United States. Many companies closed down, and millions of people were forced to stay home or lose their jobs. The United States plunged into deep, two-month-long recession.

Massive government aid, as well as the Fed’s decision cut interest rates and to pour money into financial markets, fueled a surprising rapid recovery. The rebound’s strength caught them off guard. Factory, port, and freight yards were overwhelmed by orders and had to scramble to return the workers they lost when COVID-19 struck.

As a result, there have been shortages in supply and staff, delaying shipments and high inflation. Consumer prices increased 9.1% in June from a previous year, marking the highest increase since 1981.

In an effort to control inflation, the Fed has increased its benchmark short-term rate four times this calendar year. There will be more increases in the future.

Marty Walsh, Labor Secretary, acknowledged that consumers and businesses are concerned about inflation. However, he added: “Companies continue to grow and they’re seeking employees. This is a good sign.

The Labor Department released a report that was filled with positive news. It noted that 3.9 million people were employed part-time in July for economic reasons, an increase of 303,000 from June. Department economists said This was due to an increase in people who had their hours cut by slack business.

Employers are reporting signs of weakness in the job market, too.

Aaron Sanandres is the CEO and cofounder of Untuckit, an online apparel company that has nearly 90 stores. He noticed that it was a lot easier to fill jobs at the corporate headquarters in New York, and in part-time positions at the stores in the last few weeks.

Sanandres: “We’ve had a plethora” said. He also said The labor market for engineers has been improving, likely due to layoffs at technology companies.

Simona Mocuta (chief economist at State Street Global Advisors) was one of those who were stunned by strong hiring numbers despite other indicators indicating an economy slowing down.

Mocuta said It is possible that hiring increased so quickly last month because job applicants, sensing signs of a slowdown coming, are more open to accepting jobs they wouldn’t have accepted earlier in the year. It is possible that conditions are “shifting in the favor of employers,” she said. said.

Whatever the reason, Friday’s employment data showed a remarkablely resilient and strong job market.

“Underestimate America’s labor market at your peril” said Nick Bunker, Head of Economic Research at Indeed Hiring Lab. “Yes, output growth is slowing and there are some clouds in the economic outlook. Employers are eager to find more workers, even though output growth is slowing. This demand may recede, but it’s still very hot right now.

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This story was contributed to by Josh Boak, Anne D’Innocenzio and Courtney Bonnell in Washington.