Job growth in the US has continued at a moderate speed in August. However, the unemployment rate has jumped unexpectedly. This is a sign that the labor market has been cooling down in the face of chronic inflation and rising interest rates.
Employers added 187000 jobs in the month of August, according to the monthly payroll report shared by the Labor Department on Friday. It topped the 170,000 job forecast shared by Refinitiv economists.
At the same time, there is a different picture altogether when taking a survey of the different households. According to the survey, the job market has reached 3.8% of unemployment from 3.5%, while labor force participation has reached nearly a three-year high.
It has marked the highest rate of joblessness since February of 2022 and a high increase since the COVID-19 pandemic. The report also projects a downward stream of job growth this summer. The gains for June and July were revised down by 110,000 jobs in total to 105,000 and 157,000, respectively, according to the government. This suggests a weaker market compared to how it previously appeared.
“Sharp downside revisions to job gains in 2023 and a higher unemployment rate take some steam out of the labor picture,” -Ben Ayers, a senior economist from Nationwide, has revealed.
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