The Labor Department said Friday that US employers added 528,000 jobs in July, again exceeding expectations for a labor market still recovering from the pandemic, but that came under mounting pressure from inflation as well as rising interest rates aimed at reining in prices.
The impressive performance – which brings total employment back to its level in February 2020, before the pandemic shutdowns – suggests that the slowdown in some industries has not been enough to reduce overall employment. It provides new evidence that the United States has not entered a recession.
But most forecasters expect that momentum to slow significantly later in the year, as companies cut payrolls to match lower demand.
“At this point, things are fine,” said James Knightley, chief international economist at ING Bank. “Say, December or the first part of next year, where we can see much lower numbers.”
The unemployment rate was 3.5 percent, down from 3.6 percent in June, matching a 50-year low on the eve of the epidemic.
The government reported last week that the state’s gross domestic product, the broadest measure of economic output, contracted for the second consecutive quarter when adjusted for inflation. The data showed a sharp decline in housing construction, a slowdown in business investment and a slowdown in consumer spending.
These trends are bound to affect the labor market in general, even if not uniformly or immediately.
Amy Glaser, vice president at global staffing agency Adecco, said her company is still struggling to fill hourly jobs, especially in retail and logistics. Employers may not have made these jobs attractive enough, and they may increasingly be dispensing with.
“I think we have a gap in the available jobs and the desire to do those jobs,” Ms. Glaser said. “We know there are tens of thousands of warehouse jobs out there, but being on your feet for 10 hours a day isn’t everyone’s cup of tea.”
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