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Thursday, September 29, 2022
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Unemployment Rate at a Near-50-Year Low

National

Woman in business attire shaking hands with a man in business attire. | Image by Violeta Stoimenova, Getty Images

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The U.S. job market remains surprisingly strong, adding 372,000 jobs in June, keeping unemployment low, despite ballooning interest rates and significant layoffs across several industries.

The unemployment rate in June remained at 3.6% for a fourth consecutive month, the Labor Department reported on Friday, matching a near-50-year low. However, the Federal Reserve may regard the June job gain and the past year’s streak of hiring as evidence that the rapid pace is feeding inflation.

The Fed wants job growth to slow, at least modestly, as part of its strenuous efforts to cool the economy and curb high inflation.

In response, the Fed has embarked on its fastest series of rate hikes since the 1980s, and further increases would make borrowing much costlier for consumers and businesses.

The high number of jobs added in June is a sign that a recession is not as close as all the panic makes it seem, said James Knightley, chief economist at ING bank.

“For all the doom and gloom that’s in the markets right now, companies themselves still seem pretty upbeat on their own progress,” said Knightley, “It sort of dampens the near-term fear that we’re heading into an impending recession.”

The need for many businesses to continue growing and hiring seems to be a buffer against the likelihood that the economy will tip into recession over the next year. This is somewhat at odds with the nearly 235,000 jobless claims files last week. For now, there are roughly two posted job openings for every unemployed worker.

Many employers are still struggling to fill jobs, especially in the economy’s vast service sector, with Americans now traveling, eating out, and attending public events with much greater frequency.

At the same time, economic growth has remained negative for two straight quarters. The decrease shows that consumers are slowing their spending with inflation at a four-decade high and home sales falling as the Fed raises interest rates.

The transition to a more sustainable pace of growth and hiring is likely to be bumpy. If, for example, the Fed’s rate cuts slow growth too much, as many analysts fear, the economy could slide into a recession by next year. Already, signs of a slowdown are evident. In May, consumer spending, adjusted for inflation, fell for the first time since December. Sales of existing homes have fallen nearly 9% compared with a year ago.

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Bobby
Bobby
2 months ago

Get the LAZY parasites off the tax payers back and stop paying them to stay home….F-ing Democrats

Monte Mcdearmon
Monte Mcdearmon
Reply to  Bobby
2 months ago

well said bobby

Joan McHenry
Joan McHenry
2 months ago

“Unemployment rate” = those people drawing unemployment benefits in the few months after they lost their job. Once benefits are depleted or (as is the case with many) the person doesn’t qualify for benefits because they quit or were fired for cause, those people are not counted as “jobless.” Because of the great resignation and the free money / loan cancellations being doled out by the feds, not many people are looking for jobs at the moment. Those of us who WANT to work, are working. And, inflation is through the roof, fuel prices are through the roof, taxes are through the roof.

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