“What recession?” : US employers create 528,000 jobs in July

WASHINGTON (AP) — U.S. employers added 528,000 jobs last month despite early signs of an economic slowdown, easing fears of a recession and giving President Joe Biden good news ahead of the election mid-term.

WASHINGTON (AP) — U.S. employers added 528,000 jobs last month despite early signs of an economic slowdown, easing fears of a recession and giving President Joe Biden good news ahead of the election mid-term.

Unemployment fell another notch, from 3.6% to 3.5%, matching the more than 50-year low reached just before the pandemic took hold.

The economy has now recovered the 22 million jobs lost in March and April 2020 when COVID-19 hit the United States

The searing numbers reported Friday by the Labor Department are sure to intensify the debate over whether the United States is in a recession.

“Recession – what recession?” wrote Brian Coulton, chief economist at Fitch Ratings. “The US economy is creating new jobs at an annual rate of 6 million, that’s three times faster than what we normally see in a good year.”

Economists had expected just 250,000 new jobs last month, down from a revised 398,000 in June. Instead, July turned out to be the best month since February.

The strong numbers are good news for the Biden administration and Democrats at a time when many voters are worried about the economy.

Inflation is raging at its highest level in more than 40 years and the economy has contracted for two straight quarters, which is the common – but informal – definition of a recession and does not take into account a host of other factors taken into account by economists. , like the work picture.

At the White House, Biden attributed the job growth to his policies, although he acknowledged the pain inflicted by inflation. He pointed to the addition of 642,000 manufacturing jobs during his tenure.

“Instead of workers begging employers for work, we see employers bidding for American workers,” the president said.

Biden boosted job growth through his $1.9 trillion coronavirus relief package and bipartisan $1 trillion infrastructure bill last year. Republican lawmakers and some leading economists, however, say the administration’s spending has contributed to high inflation.

The president has received more good economic news in recent weeks as gasoline prices have steadily fallen after averaging just over $5 a gallon in June.

On Wall Street, stocks fell after the release of the jobs report. While a strong job market is good, it’s also more likely that the Federal Reserve will continue to raise interest rates to cool the economy.

“The strength of the labor market in the face of … Fed rate tightening already this year clearly shows that the Fed still has work to do,” said Charlie Ripley, 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.”

The Department of Labor also reported that hourly earnings posted a healthy gain of 0.5% last month and rose 5.2% over the past year. But that’s not enough to keep up with inflation, and many Americans have to save for groceries, gas and even school supplies.

Employment growth was particularly strong last month in the health care industry and in hotels and restaurants.

The number of Americans reporting they were employed increased by 179,000, while the number reporting unemployment fell by 242,000. But 61,000 Americans dropped out of the labor force in July, reducing the share of those working or were looking for work at 62.1% compared to 62.2% in June.

New Yorker Karen Smalls, 46, began looking for work three weeks ago as a social worker support staff member.

“I didn’t realize how good the job market is right now,” she said after completing her fifth interview this week. “You watch the news and see all these bad reports…but the job market is amazing right now.”

A single mother, she weighed several offers, looking for someone close to her home and paying enough to allow her to take care of her two children.

Two years ago, the pandemic brought economic life to a virtual standstill as businesses closed and millions stayed home or were laid off. The United States plunged into a deep two-month recession.

But massive government aid — and the Fed’s decision to cut interest rates and pump money into financial markets — fueled a surprisingly quick recovery. Caught off guard by the strength of the rebound, factories, stores, ports and freight stations were overwhelmed with orders and rushed to bring back workers they furloughed when COVID-19 hit.

This resulted in shortages of employees and supplies, delayed deliveries and high inflation. In June, consumer prices rose 9.1% from a year earlier, the biggest increase since 1981.

The Fed has raised its benchmark short-term interest rate four times this year in an effort to keep inflation in check, with more increases to come.

Labor Secretary Marty Walsh conceded that businesses and consumers were worried about inflation, but added: “Businesses are still growing and they are looking for employees. And that’s a good sign.”

In a report filled with mostly good news, the Labor Department noted that 3.9 million people worked part-time for economic reasons in July, up 303,000 from June. Department economists said this reflected an increase in the number of people whose hours were cut due to the slowdown in business.

Some employers are also reporting signs of a labor market slowdown.

Aaron Sanandres, CEO and co-founder of Untuckit, an online clothing company with nearly 90 stores, noticed that over the past few weeks it had been a bit easier to fill head office positions in New York. York and part-time positions in stores. .

“We had a plethora of applicants,” Sanandres said. He also said the job market had softened for engineers, likely following some layoffs at tech companies.

Simona Mocuta, chief economist at State Street Global Advisors, was among those stunned by strong hiring numbers as other indicators show an economy in decline.

Mocuta said it’s possible hiring rose so sharply last month because job applicants, seeing signs of an impending downturn, are now more willing to accept jobs they would have turned down. earlier in the year. Conditions can now “evolve in favor of employers”, she said.

Whatever the reason, jobs data released on Friday showed a surprisingly strong and resilient labor market.

“Underestimate the U.S. job market at your peril,” said Nick Bunker, head of economics research at the Indeed Hiring Lab. “Yes, output growth could be slowing and the economic outlook has clouds on the horizon. But employers are still chomping at the bit to hire more workers. That demand may be waning, but it’s still hot in this moment. ”

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Josh Boak in Washington, Anne D’Innocenzio in New York and Courtney Bonnell in London contributed to this story.

Paul Wiseman, Associated Press