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‘Gangbuster’ job growth adds more confusion to recession worries


US job growth beat expectations in July, adding 528,000 jobs and officially reaching the point where we recovered the 22 million jobs lost during the pandemic, according to the Labor Department.

The volume of job gains, the largest in six months, surprised many economists given recent interest rate hikes, high inflation and a volatile stock market. New jobs in recreation and hospitality, professional and business services and health care led the gains.

“Amid headwinds and growing uncertainty, strong consumer spending continued to drive labor demand and support the labor market,” said Julia Pollak, chief economist at ZipRecruiter, in a press release.

“The outlook for today’s jobs report is that the economy continues to run amok,” Christopher Kayes, professor of management at the George Washington University School of Business, said in a statement. “This is an explosive jobs report with nearly twice as many jobs being created as people had expected.”

“I think it’s really going to make people wonder if the economy is going to collapse,” he added.

In another positive sign, the average unemployment rate fell to 3.5% and those who lost their jobs were out of work for a median of 8.5 weeks. Pollak says that suggests the labor market is tight enough that those laid off are quickly being hired into new jobs.

Job growth does not signal a recession, at least not yet

Job gains remain unequal for government, women and black workers

While the labor market has recovered all the private sector jobs lost during the pandemic, government jobs remain down by almost 600,000 – ‘a troubling phenomenon for public sector workers and the vital services they provide’ , wrote Elise Gould, senior economic policy economist. Institute, on Twitter.

Women gained 327,000, or about 62%, of new jobs in July, marking 19 straight months of job growth, according to the National Women’s Law Center. But despite the recent boost, women have still lost 100,000 net jobs since pre-pandemic.

Men have recovered all of their net job losses and now hold 132,000 more jobs than in February 2020.

And while overall unemployment fell to 3.5%, near record highs, it rose for black workers to 6% in July.

70% of workers are optimistic about the job market, if not the economy

Despite gloomy forecasts of recession lately, workers seem confident in their ability to find a new job if they want one or if they are forced to look for a new job.

A majority, 70%, of workers have an optimistic view of the labor market, according to a June survey of more than 1,500 people from Greenhouse, the recruiting software company. The same proportion, 70%, believe that the United States will enter a recession in the next six months. And although many expect their salary to drop during an economic downturn, 66% of people said they would actively seek a new job if their current employer cut their salary.

Indeed, Kayes said the latest employment numbers indicate the big resignation is still going strong and isn’t likely to end soon.

“I think that’s going to shock a lot of those managers, those CEOs, those leaders who think that a recession will allow them to hire more people, that it’s going to change the labor market,” Kayes said. “There will always be more positions than there are people to fill them, and organizations that don’t change the way they do business will continue to run out of hires.”

Recent headlines of high-profile layoffs, particularly at tech companies, don’t seem to be an indicator of massive layoffs to come. Layoffs accounted for 1% of the workforce in June, near record highs, according to the Labor Department.

“We don’t see an increase in layoffs at all, for the most part,” Rucha Vankudre, senior economist at Lightcast, said in a Friday briefing. “There are a few companies that have really beefed up their workforce because they had the money. And now maybe they’re going back to normal levels, but that doesn’t necessarily mean anything for the company. workforce as a whole.”

One certainty: today’s job market, in contrast to other economic indicators like the fall in gross domestic product, makes it really unclear how workers will fare in the months ahead.

Today’s picture is “so incredibly different from anything we’ve ever seen,” said Ron Hetrick, senior economist at Lightcast.

“Employers are still hungry to recruit employees,” he says. “They were never able to hire them when they had such demand. So I think everyone has to keep an open mind because things could be very, very different this time around. And I’m absolutely convinced that it won’t be the kind of pain that we usually associate with a recession, historically speaking.”

Check:

4.2 million quit in June despite recession worries: ‘A paradox in our economy’

What’s a good salary or raise to ask for right now? How to find your number in this wild job market

After Colorado enacts pay transparency law, job postings plummet, but employment rises

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