A recruiting hall for United States postal workers in Inglewood, California on July 18, 2022 afp_tickers
This content was published on August 05, 2022 – 14:11
(AFP)
The US labor market grew strongly in July, showing unexpected strength as the fight against inflation raises fears of a recession.
The unemployment rate, and the number of jobs, has returned to February 2020 levels, just before the economy was hit hard by the covid-19 pandemic.
The jobless rate fell 0.1 percentage points to 3.5%, returning to its pre-Covid-19 pandemic level, which was the lowest in 50 years, the Labor Department said Friday.
In July, the world’s largest economy created 528,000 jobs, double expectations, while job creations in May and June exceeded announcements, with 386,000 and 398,000 jobs respectively, or 28,000 after upward revision.
“Growth was broad-based, led by job creation in recreation and hospitality, professional and business services, and health care,” the Labor Department said.
Labor market data supported President Joe Biden months before the crucial midterm elections for his term.
“This is the result of my economic plan,” Biden said in a statement after the jobs report. “There is work to be done, but today’s jobs report shows we are making good progress,” he added.
The health of the labor market is being watched closely in the United States, as its deterioration could signal the approach of a recession.
– “Transition” –
The US economy has indeed contracted over the past two quarters.
However, many economists, as well as the Biden administration, assure that it is not in recession.
They particularly point to the strength of employment, as U.S. employers have faced a labor shortage for months.
White House spokeswoman Karine Jean-Pierre tried to set the stage on Thursday for weaker job creation than before.
At his daily press conference, Saint Pierre said the U.S. economy is “in transition” to slower but more stable growth.
“Y Durante esta transición”, subrayó, ya no se debe esperar el “récord de puestos de trabajo que registrado todos los meses, de unos 500.000 o 600.000 puestos de trabajo. (…) Esperamos estar más cerca de los 150.000 empleos (creados) per month”.
This would be, according to him, “a sign of the success of this transition”.
– Resigns –
However, this week has seen the first signs of a slowdown.
The number of job vacancies fell in June, falling below 11 million for the first time in seven months, according to data from the Bureau of Statistics (BLS) released on Tuesday.
But the resignations continue to be massive.
Weekly jobless claims, an indicator of the level of layoffs, started to rise again in late July, hitting their highest four-week average since November.
Unemployment insurance claims, meanwhile, hit a record high in March. Employers are reluctant to lay off workers due to severe labor shortages.
A total of 1.4 million people received unemployment benefits in the United States as of mid-July. In the same month last year, they were 13 million.
The central bank (Fed) raised rates to combat rising prices, which reached 9.1% year on year in June, a record since 1981.
Credit being more expensive, consumers are buying less, companies are reducing their level of investment and the pressure on prices is easing. But this voluntary slowdown in the economy could trigger a recession.