The US Labor Department published jobs data for the month of August, indicating where the economy is going.
August saw the numbers go down from 526,000 jobs (in July) to 315,000 (a bit lower than Dow Jones’ estimate of 318,000), while the unemployment rose to 3.7% – the highest number since February.
Economists have been expecting the overall slowdown of the economy, given that the country is still readjusting to life after the pandemic and the ongoing inflation.
Despite the slowdown, wages showed growth last month: average hourly pay grew by 0.3%.
Professional and business services, health care, and retail sectors experienced the biggest job hires – 68,000, 48,000, and 44,000 jobs, accordingly.
The ongoing inflation is the highest in more than 40 years, burdened by stimulus from the Federal Reserve and Congress and military spending on support provided to Ukraine devastated by the Russian invasion, all leading to the increasing cost of living in the country.
Last week, Fed Chairman Jerome Powell addressed the state of the economy in his annual speech at Jackson Hole and announced the measures the Federal Reserve would be taking to fight inflation, including raising interest rates and softening labor conditions.
Liz Ann Sonders, a Chief Investment Strategist at multinational financial services company Charles Schwab, characterized the ongoing market conditions as “unique,” expressing the hope that the economic decline might not be as brutal as expected.
“This is a unique period of time, where we have still a relatively tight labor market, where there is still job growth, but companies have started to announce hiring freezes, and some companies have announced layoffs,” they told CNBC. “This could very likely be a recession where you don’t see the kind of carnage in the labor market that you see in most recessions.”
Markets have positively reacted to the jobs data, with indices climbing at the open.
The S&P 500 and the Nasdaq Composite both added 0.6%, while the Dow Jones Industrial Average added 140 points, or 0.5%, with stocks among all sectors increasing in price.
Crypto markets are also looking positive, adding $10 billion in market capitalization following the news.
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