The jobs numbers continued their strong gains in August as the Bureau of Labor Statistics announced employment figures for the month. The BLS says that 315,000 new jobs were created, a better performance than expected by analysts and a strong follow-up to July’s revised number of 526,000.
The unemployment rate rose 0.2 percent reflecting the good news that more people were entering the labor market. In fact, the closely watched labor participation rate rose from 62.1 in July to 62.4 percent in August.
The Department of Labor also announced that there were 11.2 million open positions in July, up from 11 million in June. That amounts to almost two vacant jobs for every unemployed person.
But all is not a bed of roses.
Wall Street Journal:
Still, other signs point to an economy that is rapidly slowing under the weight of high inflation. The Federal Reserve is raising interest rates to slow the economy and curb price increases. Gross domestic product shrank in both the first and second quarters of the year, according to the Commerce Department.
So far, the labor market has powered on as employers try to catch up with demand following steep pandemic-driven job cuts in early 2020. Rehiring has helped boost payrolls by a monthly average of about 800,000 since they hit a trough in April 2020.
Finally, the number of people employed has reached pre-pandemic levels. But with employers having hired back just about all the employees they plan to rehire, the job numbers are expected to plummet. Those rising interest rates the Federal Reserve has initiated to slow inflation will now start to bite as employers pull back and put their plans for expansion aside as the higher costs involved in borrowing money take hold.
The job market could weaken in the coming months, as the Fed tries to tame inflation that is running near a four-decade high. Fed officials have raised their benchmark interest rate by 0.75 percentage point at each of their past two meetings. Officials are considering another rise of the same magnitude for their September meeting.
Higher interest rates are intended to make it more expensive for people and businesses to borrow and spend money, which could lead to slower economic growth and an easing of price pressures.
Any downturn in the job market won’t be noticeable until after the election. And with gas prices going down, inflation is not going to look quite as scary. Biden and the Democrats will parlay this middling bit of good news into a midterm strategy that will take credit for the economic good news while blaming Republicans for trying to destroy democracy.
It may prove to be an unbeatable combination.
Source: PJ Media
