Economy · August 5, 2022

Job growth in the United States is expected to slow as labor demand cools

US employment growth is expected to slow last month in the latest sign of easing demand in the labor market due to high inflation, tightening monetary policy and declining fiscal support.

According to economists interviewed by Bloomberg, non-farm payrolls will increase by 250,000 in July compared to 372,000 in June, while the unemployment rate will remain stable at 3.6 percent.

The data will be released by the US Department of Labor at 8:30 am Eastern time on Friday, amid fears of a downturn in the world’s largest economy a few months before the mid-term elections that will result in Congressional control.

Gross domestic product data released last week showed the second consecutive quarterly contraction in production in the United States. Economists at the National Bureau of Economic Research – the arbiters of what constitutes a recession in the United States – have not said whether a recession is underway, but any major slump in job creation could exacerbate these concerns.

Senior officials in the Biden administration have dismissed concerns that the US is already in a recession, saying the economy remains in good shape and is simply transitioning to a slower foot following the boom last year.

Jay Powell, chairman of the Federal Reserve, cautioned against reading GDP figures too much and noted that he still thought interest rates could rise further without triggering a painful plunge, but warned that the path to achieving that was becoming “tighter”.

On Thursday, the U.S. Department of Labor separately released data showing that the number of people filing for unemployment benefits last week reached 260,000, the highest level in more than six months, raising further alarm bells. on the direction of the labor market.

“We are not in a recession right now. Are the risks of recession increasing? Yes, “Loretta Mester, president of the Cleveland Fed, said at an event in Pittsburgh on Thursday. She said she expected interest rates in the United States should rise to” a little above four [per cent]”To tame inflation.