Employers reduced hiring in August, indicating that the job market may be cooling along with the rest of the economy as interest rates increase.
The Labor Department announced on Friday that employers created 315,000 jobs, down from around 520,000 the previous month and in line with what experts anticipated. The unemployment rate increased from 3.5% to 3.7% as more individuals actively sought jobs and were categorized as jobless.
“August’s employment data was much lower than July’s. However, the economy is still creating employment at a pace above the long-term average, and the overall number of jobs is currently 240,000 greater than it was before the recession “The Bright MLS chief economist, Lisa Sturtevant, said in a note.
“The Fed had hoped to see a slower rate of job creation after the extremely robust employment data for July. The slowdown in job creation in August may indicate that the Federal Reserve’s policies are beginning to take effect “She continued.
In an effort to combat skyrocketing inflation, the Federal Reserve has been increasing interest rates to depress the labor market.
Hiring has been a bright point in an otherwise sluggish economy: Despite the fact that the government thinks that the economy contracted in the first half of this year — an informal definition of a recession — companies have created an astounding average of 440,000 jobs per month over the previous three months. The rate of layoffs remains low as companies strive to retain their current employees.
Most industry have returned to pre-disaster levels.
Employers gained 68,000 positions in professional and business services, 48,000 in health care, 44,000 in retail, 31,000 in leisure and hospitality, and 22,000 in manufacturing during the month of August.
“In the last several months, the health care industry has made a rather spectacular comeback, but the leisure and hotel industry has not yet returned to pre-pandemic levels. We do want further expansion there “Before Friday’s study was revealed, Daniel Zhao, chief economist at Glassdoor, told MoneyWatch the following.
“The economy as a whole is at a turning point, but the labor market seems to be resisting gravity,” said Zhao.
This is an evolving narrative.
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