Fewer Americans got jobs in July than expected. But a steady market suggests US may avoid recession

The employment situation in the United States was weaker than expected in July, indicating a cooling job market over the summer. However, despite the lower-than-expected job growth, the overall job market seems to be resilient enough to avoid a recession, defying predictions that higher interest rates would lead to an economic downturn.

In July, U.S. employers added 187,000 jobs, which was fewer than the anticipated 200,000 new jobs. Nonetheless, the unemployment rate decreased to 3.5%, signaling that the job market remains robust.

The Federal Reserve’s 11 interest rate hikes since March 2022 have not significantly hindered hiring, and there was a positive development as more Americans entered the job market in July. This influx of workers alleviates pressure on employers to raise wages excessively to attract and retain staff.

However, it’s worth noting that the labor market momentum is slowing down, as evidenced by the decline in job openings and the number of people quitting their jobs. Despite this, economists express confidence in the Federal Reserve’s ability to achieve a “soft landing” by raising interest rates moderately to control inflation without triggering a full-scale recession.

Despite the overall strength of the job market, certain sectors are facing challenges in finding workers. In areas like New Hampshire, where the unemployment rate is low, businesses are struggling to recruit dependable workers and are resorting to bonuses and visa programs to fill positions.

In summary, while the job market has cooled over the summer and job growth in July was lower than expected, the overall strength of the market suggests that the U.S. may avoid an impending recession. However, economists remain vigilant about potential inflation concerns and the need for a balanced approach to monetary policy.

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• “U.S. employers added 187,000 jobs last month” (source: AP News)
• “unemployment rate dipped to 3.5%” (source: AP News)
• “Federal Reserve has raised its benchmark interest 11 times since March 2022” (source: AP News)
• “more Americans entered the job market last month” (source: AP News)
• “average hourly wages rose 0.4% from June and 4.4% from a year earlier” (source: AP News)
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• “job openings fell below 9.6 million in June” (source: AP News)
• “economists express confidence that inflation fighters at the Federal Reserve can pull off a rare ‘soft landing'” (source: AP News)
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