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U.S. Economy Adds 528,000 Jobs in July, Doubling Expectations

The Bureau of Labor Statistics released its July jobs report and while economists were predicting a slowing job market amid rate hikes and recession fears, the job market far exceeded expectations.

The unemployment rate also fell by one notch from 3.6 percent to 3.5 percent. Wages have also increased by a little more than 5 percent compared to the previous year.

The key news from the report is that the job market has been eclipsed from where it was in February 2022, just before the COVID-19 pandemic shut down economies across the country and led to an economic crisis.

Despite other signs of economic weakness, including news that the economy contracted in the second quarter signaling a likely recession, the jobs report is a sign that at least one aspect of the economy is strong.

“There’s no way to take the other side of it. There aren’t many “yes, buts” other than it’s not positive from a market or Fed perspective,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “This is good news for the economy.”

Markets initially reacted negatively to the report, with Dow Jones Industrial Average futures falling more than 200 points as traders anticipated a strong backlash from a Federal Reserve looking to cool the economy and particularly a heated labor market.

Leisure and hospitality led with 96,000 jobs, followed by professional and business services with 89,000. Health care added 70,000 and government payrolls grew by 57,000. Manufacturing industries also posted solid gains, with construction up 32k and manufacturing up 30k.

This week has been a whirlwind of business news. Earlier this week it was reported that jobless claims for the week ended July 30 were up from the previous week. And as the second quarter winds down, many companies like Walmart and others are signaling that they are freezing hiring ahead of a potential recession.

The Biden administration has claimed that the US is not in a recession despite two quarters of negative GDP growth. You have often pointed to the job market as a sign that the US is not currently in a recession.

The Hot Jobs report surprised analysts.

Investors are now predicting that the US Federal Reserve will hike interest rates again by 0.75 points in September in another major attempt to fight inflation, which is still at a 40-year high.

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https://kpel965.com/u-s-economy-adds-528000-jobs-in-july-doubling-expectations/ U.S. Economy Adds 528,000 Jobs in July, Doubling Expectations

Linh

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