U.S. employers added an astonishing 528,000 jobs last month despite flashing warning signs of an economic downturn, easing fears of a recession and handing President Joe Biden some good news heading into the midterm elections.
“The U.S. economy is creating new jobs at an annual rate of 6 million — that’s three times faster than what we normally see historically in a good year.”
Economists had expected only 250,000 new jobs last month, in a drop-off from June’s revised 398,000.
Inflation is raging at its highest level in more than 40 years, and the economy has contracted for two quarters in a row, which is the common — but informal — definition of a recession and does not take into account a host of other factors economists consider, such as the job picture.
Biden has boosted job growth through his $1.9 trillion coronavirus relief package and $1 trillion bipartisan infrastructure law last year.
The good news about job creation was mostly offset by worries that the Federal Reserve will have to keep aggressively raising interest rates to cool the economy and tamp down inflation.
“The strength of the labor market in the face of … rate-tightening from the Fed already this year clearly shows that the Fed has more work to do,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.
″ The Labor Department also reported that hourly earnings posted a healthy 0.5% gain last month and are up 5.2% over the past year.
In a report filled with mostly good news, the Labor Department did note that 3.9 million people were working part time for economic reasons in July, up by 303,000 from June.
Aaron Sanandres, CEO and co-founder Untuckit, an online clothing company with nearly 90 stores, noticed that in the past few weeks that it has been a bit easier filling jobs at the corporate headquarters in New York and part-time roles at the stores.
Mocuta said it is possible that hiring rose so sharply last month because job candidates, seeing signs of an impending slowdown, are now more willing to accept jobs they would have balked at earlier in the year.
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