The US job market slowed in August

The US job market slowed in August

< p class="sc-v64krj-0 knjbxw">There were more than 11 million vacancies at the end of July in the United States, or two positions for every job seeker.

The US labor market slowed in August, with the unemployment rate rising and far fewer jobs being created. This is a paradoxically positive signal, because the fight against inflation requires a slowing economy.

President Joe Biden reacted on Twitter, welcoming the great news, saying the job market remains strong and pointing out that even more Americans are coming back to work.

The jobless rate rose again for the first time since January, climbing to 3.7%, the Labor Department said Friday.

It had fallen in July to 3.5%, its February 2019 level, just before the economy was hit hard by the COVID-19 pandemic.

Job creation slowed sharply last month to 315,000 from 526,000 in July. This figure is in line with analysts' expectations.

In July, the job market showed unexpected dynamism, returning to 22 million for the first time. jobs that had been destroyed due to the coronavirus.

At the end of July, there were more than 11 million vacancies, or two positions for every job seeker.

Already, on Wednesday, the jobs created in August in the private sector alone had disappointed: 315,000 positions were expected, but there were only 132,000, according to the ADP/Stanford Lab monthly survey.

“We believe these numbers suggest a transition to a more moderate hiring pace. »

— Nela Richardson, Chief Economist, ADP, on a conference call

Businesses of all sizes are trying to understand the complex economic situation related to the global economy, according to her. #x27;high inflation and lack of workers as they seek to hire in a big way.

Neither the economic slowdown, nor fears of recession, nor even the measures taken by the American central bank (Fed) to curb demand and curb inflation had gotten the better of the iron health of the US market. employment so far.

The gross domestic product (GDP) of the United States contracted in the first two quarters of 2022, which corresponds to the classic definition of a recession. And if the first economy in the world does not seem to fit in this box this time, it is in particular because of the good shape of its labor market.

The fight against high inflation, however, will go through a slowdown in employment, and probably even a rise in the unemployment rate.

Jerome Powell, the boss of the Fed hammered home this last week at the Jackson Hole conference: returning to price stability will lead to a long period of weaker growth as well as a slowdown in the labor market.

The fight against high inflation will require a slowdown in employment, and even probably a rise in the unemployment rate .

Especially since, for more than a year, companies have been facing a labor shortage and that to recruit they offer wage increases, which helps to push up prices.

The Fed, which acts in the face of inflation, gradually raises its key rates, in order to make the more expensive credit for individuals and businesses, and thus slow down consumption, and therefore pressure on prices.

It will raise its rates again at its next meeting, on 20 and September 21.

Inflation, at its highest in 40 years, has however slowed ti in July, at 8.5% year on year, according to the consumer price index.

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