Wall Street will keep an eye on Friday's new US jobs data. This is the latest indication if the US economy is entering a recession as theFederal Reserve implements its fight against inflation to slow the economy and reduce demand. It is intended to
Resilient employment in recent months has so far endured a series of rising borrowing costs by his Fed, but economists say his 7 We expect the monthly employment data to reveal a marked slowdown.
This week saw job cuts at big names like Walmart and Robinhood, andgovernment reportssaid job openings dropped sharply in June. There is growing evidence of a softening of
According to Bloomberg, the median economic forecaster said in July he expects 250,000 nonfarm jobs to be added.The figure would be the lowest monthly increase since December,and a significant drop from the 372,000 jobs added in June. The unemployment rate remained at a historic low of 3.6% in June.
Moreover, the expected figures point to a break from the sustained strong employment in the first half of 2022, when the economy added an average of 461,000 jobs each month.
"The labor market is showing positive signs for the economy, but there are signs that the labor market is clearly cooling," Daniel Zhao, senior economist at career site Glassdoor, told ABC News. rice field. “The labor market looks healthy – layoffs are still very slow despite slowing demand.”
Slowing employment worries economists and ordinary Americans. However, signs of weakening labor demand could ease pressure on the Fed to maintain its aggressive rate hikes. The central bank raised its benchmark interest rate by 0.75% at its meeting in the last two months. The last dramatic increase was in 1994.
A drastic reduction in prices will not only sustain but exacerbate inflation. According to data released last month,prices showed a staggering 9.1% increase in June.. This corresponds to the highest inflation rate in over 40 years.
Federal Reserve Chairman Jerome Powell said after two days of speak at a press conference.
Elizabeth Frantz/Reuters, FILE
Amazing In particular, rising prices coincide with contracting economic output. Gross domestic product fell 0.9% on an annualized basis in the second quarter after falling 1.6% in the previous quarter.
Recent trends fit the shorthand definition of a recession consisting of two consecutive quarters of GDP declines. It depends on a wider range of indicators.
So far this year, the tight labor market has provided a strong corner of the economy. But Tuesday's jobs data showed a softening, with job openings plummeting to his lowest level in nine months in June, according to a government report. But his 10.7 million job openings reported in June are still high.
Meanwhile, in recent days, a number of large companies have announced job cuts or a slowdown in hiring. Walmart on Wednesday laid off nearly 200 company employees,the Wall Street Journal reported. The day before,Robinhood announced plans to cut his 23% of staff. Alphabet, the parent company of tech giants Apple, Amazon and Google, recently announced a hiring delay.
Still, the overall strong employment in recent months defies the typical conditions of a recession, Glassdoor's Zhao said.
"It's very unusual to have a recession when you're adding hundreds of thousands of jobs a month," he said. "Of course, a shockingly bad report of job losses this month could change things."