In an unexpected twist given all the other labor news we’ve seen over the course of this week, the Bureau of Labor Statistics monthly report shows that 528,000 non-farm jobs were created in July, more than doubling economist expectations.
Payroll employment rises by 528,000 in July; unemployment rate edges down to 3.5% https://t.co/1Y9cSWJUIB #JobsReport #BLSdata
— BLS-Labor Statistics (@BLS_gov) August 5, 2022
The unemployment rate also ticked down to 3.5 percent, down from last month’s 3.6 percent. The wage rate has risen 5.2 percentage from last year.
Despite the rate of inflation still being up more than 9 percent from a year ago and far outpacing wages, and despite other signs of economic weakness, it’s clear that the job market is going strong.
The report also showed, however, that the labor market is still strong in spite of other economic indicators.
“There’s no way to take the other side of this. There’s not a lot of, ‘Yeah, but,’ other than it’s not positive from a market or Fed perspective,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “For the economy, this is good news.”
Initial reactions to the report were negative by the markets, with Dow Jones Industrial Average futures falling more than 200 points. This was because traders expected a strong response from the Federal Reserve to cooling the economy and a hot labor market.
The most important news to come out of today’s report is that private sector jobs have now eclipsed February 2022 levels, just before the pandemic forced economic closures throughout the country.
The positive news comes in the wake of last week’s news that the second quarter GDP shrank, signaling a recession was coming. Biden’s administration maintained, among other things, that the strong labor market meant we weren’t in a recession. In fact, it could prevent one. With today’s jobs report, most investors are now pricing in another 0.75 percentage point hike from the Federal Reserve in September.
About Post Author
