The US labor market did not notice the recession – Newspaper Kommersant No. 143 (7344) of 08/09/2022
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The unemployment rate in the US in July, despite the reduction in the country’s GDP in the first half of the year, fell from 3.6% to 3.5%, 528 thousand jobs were created during the month, according to data from the US Department of Labor. Over the previous four months, the average monthly increase in the number of jobs was noticeably lower – 388 thousand. Both indicators have already returned to the levels that they were in February 2020 – before the start of the pandemic. The total number of employed in the US in July was 629 thousand higher than in February 2020.
Recall that in the second quarter, US GDP fell by 0.9% year on year (that is, if the indicator changed at the same pace throughout the year) after a decline of 1.6% in the first quarter (see “Kommersant” dated July 29). This caused talk about the beginning of a technical recession in the United States. In particular, the fact that the US economy plunged into recession, said the leader of the Republican minority of the House of Representatives, Kevin McCarthy. The US administration does not agree with this interpretation. “If you look at our labor market, consumer spending, business capital investment, then you will see signs of economic progress in the second quarter,” US President Joe Biden said.
As follows from the latest data from the US Department of Labor, a more significant increase in the number of jobs in July was provided by tourism (entertainment and the hotel sector, plus 96 thousand places, but employment here is still 7.1% lower than before pandemics), professional and business services (plus 89 thousand), healthcare (plus 70 thousand). In the public sector, the increase was 57 thousand, in construction – 32 thousand, in retail trade – 22 thousand jobs. Employment in the industry increased by 30 thousand people, including in the production of semiconductors and electronic components – by 4 thousand. 5.7 million people were unemployed in July. The number of those who cannot find a job for more than 27 weeks decreased over the month by 269 thousand, to 1.1 million people (18.9% of the total).
“The latest labor market data calls into question claims that the economy is on the verge of a recession and increases the likelihood of another 75 basis point rate hike by the US Fed in September,” Capital Economics said. The labor market also does not yet notice a decrease in activity in the industrial sector and construction.
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