New York: America’s employers added a stunning 528,000 jobs last month despite raging inflation and anxiety about a possible recession, restoring all of the positions lost in the coronavirus recession. Unemployment fell to 3.5 per cent, the lowest level since the pandemic struck in early 2020.
There were 130,000 more jobs created in July than there were in June, and the most since February.
The red-hot jobs numbers from the Labor Department on Friday arrive amid a growing consensus that the economy is losing momentum. The US economy shrank in the first two quarters of 2022 _ an informal definition of recession. But most economists believe the strong jobs market has kept the economy from slipping into a downturn.
Friday’s surprisingly strong report will undoubtedly intensify the debate over whether America is in a recession or not.
The Labor Department also revised May and June hiring, saying an extra 28,000 jobs were created in those months. Job growth was especially strong last month in the healthcare industry and at hotels and restaurants.
The jobless rate fell as the number of Americans saying they had jobs rose by 179,000 and the number saying they were unemployed dropped by 242,000. But 61,000 Americans dropped out of the labor force in July, trimming the share of those working or looking for work to 62.1 per cent last month from 62.2 per cent in June.
While a strong job market is a good thing, it also makes it more likely that the Federal Reserve will continue raising interest rates to cool the economy.
“The strength of the labor market in the face of ... rate tightening from the Fed already this year clearly shows that the Fed has more work to do,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. “Overall, today’s report should put the notion of a near-term recession on the back-burner for now.?”