Once again. The U. S labor market demonstrated last month that it
is far more robust than many thought. Some economic indicators are
showing signs of short slowdowns. And yet a hiring boom remains at
the strongest levels in many years. While the unemployment rate is
at a five decade low, John Yang get some analysis of what's happening.
Judy. The Jobs report showed good news across the private sector
building on three months of steady employment gains. But the U. S
economy shrank in the first half of the year, and new home sales
have fallen, and that's sparking fears of recession. So just what
is going on with the economy? Special correspondent Catherine Rampell
is here to try to help us through that she's a Washington Post columnist.
Catherine, Thanks so much for joining us. Let's focus first on today's
jobs report and and and the jobs market. Why is this, uh, hiring
jobs creation so robust right now? Well, it looks like businesses
are still in great demand for workers. In fact, the pace of job growth
accelerated in July. Contrary to a lot of economists, expectations,
But look
The last few months we have seen about twice as many vacancies as
there were unemployed workers available, and it looks like that demand
for hiring is not letting up. As long as consumers keep spending
businesses still need workers, so they're scooping up as many as
they can. They're anything underneath those sort of top line numbers
in this report. Are there any signs of concerned or that that should
be creating some concern?
In general. It was a very strong report again. This was faster, pace,
faster pace of hiring than we expected, and in fact, we have now
recovered all of the jobs lost at the very beginning of the pandemic.
But there were some numbers that were a little bit concerning, for
example, the number showed that the labor force participation rate
declined. That means the share of people who were either working
or looking for work went down.
And that's a bit of a puzzle. Given that the economy is very strong.
As I said, there's huge demand for workers much more demand than
there is the number of workers available normally that would be drawing
more people into the Labor force, and instead we're seeing the reverse.
And another thing that might be somewhat worrying. That's a little
bit counterintuitive is that this jobs report was so robust. It shows
that the economy is so hot that it might encourage the federal Reserve
to actually, if not necessarily accept.
L a rate the pace of rate hikes, which it might at least keep its
its foot firmly on the break, meaning that if they're worried about
the economy overheating, and this report continues to show that the
job market the job market is strong. The job market is hot.
That they might decide that they need to cool it down a little bit.
And as a result, um you might see those rate hikes, which will be
painful, so it it's kind of a good news. Bad news story. You almost
want to Goldilocks type of report that that were job job growth is
not so strong that it looks like we're overheating. Not so weak that
it looks like we're in recession. It's you know, a steady pace, and
we're more than a steady pace at this point.
Will help us with the sort of the bigger picture on the one hand,
we did have the economy the has measured by gross domestic product
shrink in the first half of this year. On the other hand, you do
have these robust job creation numbers. So is the bigger concern
a recession, as evidenced by the GDP numbers or as you just mentioned
an overheated economy.
It's a really confusing picture. Right now the economy is sending
out a lot of mixed signals. Some numbers look great. The jobs numbers
look great GDP As you pointed out, Not so great GDP shrank the first
half of this year, the housing market not doing so well consumer
spending doing very well. So it's very hard to tell a coherent story
about this economy. Right now, the best economists in the world are
puzzling through the data and trying to make sense of this sort of
cacophony of numbers, which many of which contradict each other.
Um, And if you are the Federal Reserve, I think you're in a really
challenging position right now to figure out is the economy overheating,
Or is it weakening Because if it's overheating, that suggests one
course of action that suggests higher rate hikes faster rate hikes,
If, in fact it's it has a lot of underlying weakness as some of those
others numbers show.
That suggests that maybe they shouldn't act so aggressively to tightened
financial conditions. It's very puzzling right now, and it's hard
to make sense of the data. I mean, one thing that may happen is that
a few months down the line, we'll see some revisions. There are always
lots of revisions to these numbers, probably especially more today.
Given what a weird economy we're in
And that may eventually tell us a more coherent story. Another puzzle.
You mentioned the fact that there are more job openings than there
are people looking for jobs. And yet you also have this job hopping
part of the great job. The great resignation. Explain what's going
on there.
Well, there are a lot of opportunities right now. For workers, some
of which offer better pay better benefits that are ours, etcetera.
So as long as the market is good, I think you see, a lot of workers
decided to trade up if they can.
Special correspondent in Washington Post columnist Catherine Rampell.
Thank you very much.