For several months, as inflation has been on the rise, the Central Reserve As it aggressively moves to cut back, monthly employment reports raise a question: Has the labor market succumbed to gravity yet?
The answer, so far, is “no, mostly not.” But in Friday’s July report, the answer is likely to be, “Yes, but it didn’t hit the ground.”
The bright side of the economy has been strong job growth, with 6.3 million jobs added over the past 12 months, since supply chain problems and the war in Ukraine sent prices skyrocketing. As of June, the United States had lost 520,000 jobs at its prior peak, capped by a drop in government employment.
But that recovery is accelerating as inflation dampens consumers’ spending power and darkens their mood, and rising interest rates begin to weigh on demand for big purchases like homes and cars. Gross domestic productAdjusted for inflation, it fell for the second quarter in a row, hampered by slower growth in inventories and falling residential investment.
And, more recently, there are signs that the economic downturn is affecting the labor market as well. Job opportunities Demand for retail, leisure and hospitality workers has fallen from their record highs in the spring. Initial Claims Jobless claims were 260,000 last month, up from 166,000 for the week in March. Recruited at LinkedIn Declines from AprilEspecially in construction and hotel accommodation.
On average, forecasters expect Friday’s report to show the country added 250,000 jobs in July. Last month’s report showed a profit 372,000 in Juneon par with the previous three months.
Polling and analytics firm Morning Consult, which studies They found that the number of adults in the U.S. reporting a loss of income due to layoffs or reduced hours increased by about 20,000 a week. That increase has been sharpest among black and Hispanic workers, consistent with research showing that people of color are the first to suffer from the hiring slowdown.
However, the increase in income losses is not concentrated in sectors sensitive to spikes in the spread of the coronavirus, as it has been since 2020.
“It’s not a Covid story – I think it’s a broader macro recession,” said John Lear, chief economist at Morning Consult. “People have been hoarding workers, and now, we’re at a point where it makes sense to release them because of the uncertainty of the business cycle.”