Daily Brief: The US Adds 528,000 Jobs, Even With A Recession To Manage

Daily Brief: The US Adds 528,000 Jobs, Even With A Recession To Manage

over 1 year ago3 mins

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Data out on Friday showed that the US economy added far more jobs than expected last month.

What does this mean?

The US government euphemistically dismissed the arrival of a technical recession last week as a “transition to a lower footing”, which is the equivalent of saying that going bald is a “transition to a lower hair count”. Call it what you want, but the slowdown was still expected to impact the country’s workforce in July. So imagine everyone’s surprise when it didn’t: the US added 528,000 jobs – more than twice the 258,000 expected, and well ahead of the already impressive 388,000 average gain of the past four months. Consider too that the number of people either in or looking for work dropped yet again, meaning the unemployment rate fell to 3.5% – tied for the lowest it’s been since 1969.

US jobs
Source: The Wall Street Journal, Labor Department

Why should I care?

For markets: Nothing can stop the Federal Reserve.

The Federal Reserve mainly focuses on two aspects of the economy in its decision-making: the jobs market and inflation. So the fact that the former is so strong gives the central bank more leeway to keep being tough on the latter. More incentive too: last month’s higher-than-expected wage growth will give people more disposable income, while increased competition for a smaller pool of workers will only drive wages higher still. That might be why even more traders are now betting on a third-straight 0.75% hike in September.

US unemployment

Zooming out: Don’t be fooled.

You don’t need to go far to find less favorable signs for the global economy: data out last week showed that global chip sales growth – a good indicator of demand since they’re used in everything from cars to computers – has now fallen for six straight months. That’s the longest drop-off since the US-China trade war in 2018, and it’s yet another foreboding sign that a global recession is right around the corner.

Keep reading for our next story...

DoorDash Continued To Show That It Didn’t Need Lockdowns

DoorDash image

US food delivery app DoorDash posted a bevy of all-time highs late last week.

What does this mean?

There were concerns – entirely legitimate ones – that both rising inflation and the post-pandemic novelty of open restaurants would drag on demand for takeout last quarter, but DoorDash didn’t see any such signs. In fact, it boasted a laundry list of records: a record number of users, a record value of orders, and record monthly subscriptions from over 10 million members – nearly half its roughly 25 million monthly active users. Throw in a strong showing from the Finnish delivery platform it bought late last year, and DoorDash’s overall revenue rose by a better-than-expected 30%. You can hardly blame investors for getting carried away after an update like that: they sent its shares up 20%.

DoorDash growth

Why should I care?

The bigger picture: This is DoorDash’s town.

DoorDash made the most of the early lockdowns, getting a foothold in the American suburbs and quickly establishing itself as the dominant meal delivery service in the country. And it’s only grown its market share since then: the company was responsible for 59% of all US food delivery sales in May, according to data from Bloomberg Second Measure. And now, it's expanding into other services like convenience store items, groceries, and alcohol, which could see it extend its lead over the likes of Grubhub and Uber Eats even more.

DoorDash market share

Zooming out: The gig isn’t up just yet.

Multiple gig economy companies seem to be trouncing analysts’ post-pandemic expectations, with Lyft posting its highest-ever quarterly profit last week thanks to strong demand and savvy cost-cutting. But while the ride-hailing giant said it was expecting more trips this quarter as the new school year kicked off, it did warn that higher insurance costs could hit its profit growth in the rest of the year.

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