Jobs report doesn’t show signs of recession—yet—as labor market remains strong: The Fed should still be wary of raising interest rates much further
Below, EPI economists offer their initial insights on the jobs report released this morning, which showed 528,000 jobs added in July.
From EPI senior economist, Elise Gould (@eliselgould):
Read the full Twitter thread here.
Most job added in education and health services, leisure and hospitality, and professional and business services. Govt jobs increased in July, but remain nearly 600k below pre-pandemic levels, a troubling phenomenon for public sector workers and the vital services they provide. pic.twitter.com/kdVU4A0Tiu
— Elise Gould (@eliselgould) August 5, 2022
Year-over-year wage trends indicate moderating wage growth in recent months. The latest quarterly change (annualized) shows an increase in July, but it may be a blip in an otherwise downward trend and is almost surely still pulling down (not pushing up) inflation. pic.twitter.com/XvzjajJuE5
— Elise Gould (@eliselgould) August 5, 2022
As the overall unemployment rate ticked down to 3.5%, it was down to 2.6% for Asian workers, 3.1% for white workers, and 3.9% for Hispanic workers. Black unemployment–though a notably more volatile series–saw an increase, back up to 6.0% (with falling participation and EPOPs). pic.twitter.com/Dez9ADYI4r
— Elise Gould (@eliselgould) August 5, 2022
From EPI president, Heidi Shierholz (@hshierholz):
Read the full Twitter thread here.
It’s worth noting, however, that employment in the household (HH) survey has been essentially flat in recent months (the 3-month moving average of employment in the HH survey is down 54,000 since May). Why is that worth noting? 2/
— Heidi Shierholz (@hshierholz) August 5, 2022
The unemployment rate dropped to 3.5% in July, for a mix of good and bad reasons—the share of the working-age population with a job rose by 0.1 percentage points, but the labor force participation rate declined by 0.1 percentage points. 4/
— Heidi Shierholz (@hshierholz) August 5, 2022
Make no mistake, we generally want positive real wage growth for workers! But decelerating wage growth means the Fed doesn’t need more interest rate increases to contain inflation. 6/
— Heidi Shierholz (@hshierholz) August 5, 2022
There is still a giant gap in state and local govt jobs—they are down 605,000 since Feb ‘20, with close to half of that, 282,000, in education. It’s crucial that state and local govts use their ARPA funds to raise pay and refill those jobs. 8/
— Heidi Shierholz (@hshierholz) August 5, 2022
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