The United States The Department of Labor has released employment data for August, indicating where the economy is heading.
In August, the numbers dropped from 526,000 jobs (in July) to 315,000 (slightly less than the Dow Jones estimate of 318,000), while unemployment rose to 3.7%, the highest number since February.
Economists had been expecting the general economic slowdown as the country is still readjusting to life after the pandemic and ongoing inflation.
Despite the slowdown, wages showed growth last month: the average hourly wage grew by 0.3%.
The professional and business services, healthcare and retail sectors recorded the largest job hires: 68,000, 48,000, and 44,000, as a result.
Current inflation is the highest in 40 years, burdened by Federal Reserve and Congressional stimuli and military spending on support for Ukraine devastated by the Russian invasion, all leading to rising cost of living in the country.
Last week, Fed Chairman Jerome Powell addressed the state of the economy in his annual Jackson Hole speech and announced the steps the Federal Reserve would take to fight inflation, including raising interest rates and the softening of working conditions.
Liz Ann Sonders, Chief Investment Strategist at multinational financial services firm Charles Schwab, called the current market conditions “unique”, expressing hope that the economic decline may not be as brutal as expected.
“This is a unique period of time, where we still have a relatively tight labor market, where there is still employment growth, but companies have started announcing hiring freezes and some companies have announced layoffs.” , they told CNBC. “This could most likely be a recession where you don’t see the kind of carnage in the job market that you see in most recessions.”
Markets reacted positively to employment data, with indices rising at the opening.
The S&P 500 and Nasdaq Composite both added 0.6%, while the Dow Jones Industrial Average added 140 points, or 0.5%, with stocks across all sectors rising in price.
Cryptocurrency markets also look positive, adding $ 10 billion in market cap following the news.
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