Saturday, August 6, 2022

Job market still hot, salaries rising… 4 key points from July employment report

Labor Department report strong JulyemploymentThe data shows the US job market is still heating up, the Associated Press (AP) analysis reported, and is basically back in the new crown by July.EpidemicThe back level plays in contrast to the continuous sound of “fall” in the normal environment.irrigatedThere is a constant fresh capital, as more people are employed and wage increases are still unable to offset the effects of inflation.

1. The job market returns to pre-pandemic levels

Non-farm payrolls in the US increased by 528,000 jobs in July, much higher than the 250,000 originally expected by academics; Bank of America Securities economist Stephen Juno said while job demand rumors are news of a sharp contraction, that data is “spraying cold water on these voices.” “This data is a good omen for the US economy and Labor itself. “

Unemployment fell to 3.5% in July, and fell to the same level in February 2020, on the eve of the Covid-19 outbreak, and the total number of jobs provided by employers is even higher than before the pandemic However, the recovery has been uneven: for example, the services sector is stronger than it was before the pandemic. About 1 million jobs have been added, while the manufacturing sector has grown by only about 41,000; Leisure and hotel industry jobs are still around 1.2 million fewer than before the pandemic, and government agency jobs are also down by about 500,000.

2. All data is “bearish” except employment rate

Despite the unexpectedly strong employment, the vast majority of the remaining data suggests that the US economy will slide into a recession, or even be in a recession, such as negative GDP growth for two consecutive quarters, which is a sign of a recession. Doesn’t fit any definition. Data, such as people’s commodity consumption, business investment, inventory replenishment speed, and even employers’ willingness to recruit, inflation and other data, all show that the economic outlook will turn negative.

3. Chances of Another 3 Yards Increase by the Fed Raises to 70%

But in any case, such a strong employment report could allow the Fed to remain bullish and impose further monetary tightening to curb inflation; The Fed originally expected to raise interest rates three times in September. The odds were 34%, which rose to 70% after the release of jobs data, despite an encouraging report on the 5th, mainly due to weakness in stocks.

4. Wages up 0.5% since June

In July, the average hourly wage for employees of staff increased by 0.5% compared to the previous month, and a 5.2% increase from the same period last year. However, compared to the inflation figure of 9.1% in June, the increase in wages may not meet the impact of inflation on the public; Some scholars worry if inflation continues to decline, and companies are forced to raise wages. I fear that wages and inflation will show an interrelated upward trend, which will be detrimental to corporate revenue performance.

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