3 months ago • 2 mins
What’s going on here?
Data out on Friday showed the US stuck to its tune and added more jobs than expected last month – but, record scratch, the country might be headed down a better track this time.
What does this mean?
The US adding a more-than-expected 187,000 jobs in August sounds less than ideal for the anti-inflation attack. But look a little closer, and the labor market in the world’s biggest economy might actually be cooling off. That was the third month in a row that there were fewer than 200,000 jobs added, while data out this week showed that the number of job openings fell to the lowest in over two years. Add in that the unemployment rate unexpectedly jumped up to 3.8%, and the hot-to-touch market is looking a little more tepid.
Why should I care?
Zooming in: Retirement was nice while it lasted.
Once-free folk have been crawling back to the workforce to earn a few extra bucks. And with more potential workers to choose from, employers may not have to inflate their salaries to compete with each other for job seekers’ attention. That’s just what the Federal Reserve (the Fed) wants to hear, since rising wages tend to stoke inflation. The central bank, then, might not have to slam the big, red “rate hike” button for now. Markets are certainly hoping so: they’re betting the Fed’s next two meetings will be hike-free.
The bigger picture: Take your pick: recessions or spiders.
The jobs market has a lot of sway on the direction of the economy. This kind of data, then, could mean the US is one step closer to achieving the once-unlikely but coveted “soft-landing” scenario, managing to tame inflation without a full-blown recession. In fact, some economists are expecting the economy to keep up its sturdy growth this quarter, making fears of even a shallow recession look like irrational phobias.
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