WASHINGTON – Talk of recession is everywhere. Inflation is at a 40-year high, the stock market is spiraling, and consumer sentiment has tanked to an all-time low. But the job market remains exceptionally strong.
This morning, the Labor Department reported that 372,000 jobs were created in June, a healthy showing that beat forecasts, which generally expected between 200,000 and 300,000 new jobs.
For economists and policymakers, the hope is that jobs growth – which has been hovering around 400,000 new positions per month – will slow to a sustainable pace that could help moderate inflation, without a significant rise in unemployment.
The labor market is a crucial indicator of whether the country is in a recession, and so far there is little indication of a dramatic cooldown.
The unemployment rate held steady at 3.6%, near historic lows. The Federal Reserve expects the jobless rate to rise gradually to 4.1% by 2024. Overall, U.S. employers have added more than 6 million jobs in the past year.
The new jobs report adds to evidence that the current labor market recovery has been dramatically faster than the one after the global financial crisis and the Great Recession.
The Biden administration has been desperate to get credit for that accomplishment – but voters fixated on surging inflation don’t seem impressed.
After the housing bubble popped in 2008, it took more than six years for the economy to claw back the roughly 8 million jobs that had been obliterated.
Labor market wreckage from the pandemic was even greater: Between February and April 2020, roughly 12 million jobs vanished.
Two years later, though, almost all of them have been recovered. And if the recent pace of hiring continues, they will all be back by September.
At the White House on Friday, President Joe Biden narrowed his focus to just private-sector employment and claimed “mission accomplished” on the jobs front.
“Today, we learned that our private sector has recovered all of the jobs lost during the pandemic, and added jobs on top of that,” the president said in a statement.
“This has been the fastest and strongest jobs recovery in American history, and it would not have been possible without the decisive action my Administration took last year to fix a broken COVID response, and pass the American Rescue Plan to get our economy back on track.”
The flip side of the labor market’s rapid healing has been the highest inflation in 40 years, according to many economists.
And voter concern over those rising prices is putting at risk the president’s hopes of keeping Democrats in control of Congress this year – and hanging onto his own job in 2024.
Industries of all kinds continued to hire briskly in June, with some of the biggest jumps in professional and business services (which added 74,000 positions), leisure and hospitality (67,000) and health care (57,000).And despite signs that consumers may be pulling back on spending, goods and services industries continued to hire at healthy levels. Employment rose in retail, as well as in transportation and warehousing and manufacturing and education.
Meanwhile, children’s day-care centers added 11,000 workers, while nursing and residential care facilities hired 8,000 – promising developments that could help get more parents and caregivers back into the labor force.
“Strong employer demand is supporting the solid jobs gains,” said Daniel Zhao, senior economist at jobs site Glassdoor.
“There may be fear that the economy is slowing, but the labor market is a point of strength. … It remains healthy and does not look like a labor market on the edge of recession.”
Although many sectors have made up for pandemic losses, that isn’t the case for restaurants, hotels and other leisure and hospitality businesses.
Employment there is still down by 1.3 million workers, or nearly 8%, from February 2020.
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