US Economy Smashes Jobs Projections Despite Signs Of Recession

US Economy Smashes Jobs Projections Despite Signs Of Recession

Max Keating on July 8, 2022

The U.S. economy added 372,000 jobs in June while the unemployment rate held steady at 3.6%, according to Department of Labor data released Friday, far outpacing economists’ projections of 250,000 new jobs.

The massive job growth is good news on paper, but may cause the Federal Reserve to aggressively raise interest rates, thereby creating a higher risk of recession later in the year, tweeted economist Howard Forman. The total number of unemployed people remained essentially unchanged at 5.9 million, the report found.

Payroll employment rises by 372,000 in June; unemployment rate remains at 3.6% https://t.co/1Y9cSWKsy9 #JobsReport #BLSdata

— BLS-Labor Statistics (@BLS_gov) July 8, 2022

“The CPI has gotten all the attention for the past 18 months, but with the U.S. on recession watch, the jobs report is back as the most important data every month,” president of the American Action Forum Doug Holtz-Eakin told Axios.

The latest Job Openings and Labor Turnover Survey, released on Wednesday, showed there were 11.3 million job openings in May, or 1.9 positions for every job seeker.

But there have also been signs that job growth might be slowing and some firms could be planning for downsizing. Data released Thursday by market research firm Challenger, Gray & Christmas revealed that US employers announced 32,517 layoffs in June, a 58.8% increase from June 2021.

Job gains in June were largely reported in the professional and business services, leisure and hospitality, and health care sectors. The growth represented a slight month-over-month decrease compared to May when the economy added a more-than-expected 390,000 jobs.

The labor force participation rate of 62.2% remained below its February 2020 pre-pandemic level of 63.4%.

The report comes after financial markets posted their worst six months of a calendar year in fifty years.