The July data is much better than expected and the continued robustness of the labor market gives the US government a break, in the midst of a debate on whether the world’s largest economy is already in a recession scenario.
The strong job creation recorded in July in USAwith more than half a million new jobs, endorses the arguments of the Government of Joe Biden on the strength of the labor market and refute the predictions of a recession in the world’s largest economy.
According to data published this Friday by the Bureau of Labor Statistics (BLS), the unemployment rate, which had been at 3.6% for four months, fell one tenth in July, to 3.5%, the same figure than in February 2020, which was then a 50-year low.
While, the number of unemployed fell to 5.7 millioncompared to the 5.9 million registered in June.
During the past month, the world’s leading economy managed to create 528,000 jobs according to this statistic, which highlights that the figures for the US labor market are already at pre-pandemic levels.
Job creation is much higher than the monthly average of the previous four months (388,000). Since April 2020, the worst month of the crisis caused by the pandemic in labor terms, 22 million jobs have been created.
July data is much better than expected and the continued robustness of the labor market gives the US government a break, in the midst of a debate on whether the world’s leading economy is already in a recession scenario, a thesis that the Joe Biden government has rejected at all times, highlighting precisely the strength of the labor market.
“Today, the unemployment rate coincides with the lowest in more than 50 years: 3.5%. More people are working than at any other time in American history.”Biden pointed out this Friday, minutes following this information was known.
In his opinion, the data is the result of his economic plan “to build the economy from the bottom up and towards the center” and to “rebuild the middle class.”
“There is more work to be done, but today’s jobs report shows that we are making significant progress for working families,” the president added.
technical recession
Thus, with these figures the figure for the gross domestic product (GDP) is offset, which fell by 0.2% in the second quarter, the second consecutive quarterly drop, that plunged the country into a technical recessionaccording to the traditional definition of economists.
This setback was caused by the runaway inflation and by the disruption of the global supply chain, heavily affected by both the pandemic (with China still facing outages and closures due to coronavirus outbreaks) and the war in Ukraine.
In the second quarter, inflation increased by 8.2%, following growing 8% in the first quarter, a situation that caused the Federal Reserve to raise interest rates last week by 0.75 points for the second consecutive month .
Although the growth of employment in July was generalized, the sectors where it increased the most were leisure and hospitality, as well as professional and business services and health.
In the private sector, 629,000 jobs have been created compared to February 2020, although several sectors have not yet recovered. Meanwhile, public employment has lost 597,000 jobs with respect to the pandemic.
The BLS also offered an x-ray of the unemployed and indicated that the number of people who lost permanent employment stood at 1.2 million in July and continued its downward trend during the month, with 129,000 fewer people than in February 2020. .
The number of people temporarily unemployed stood at 791,000 in Julywas little changed from the previous month and has returned to its pre-pandemic level.
The number of long-term unemployed (those out of work for 27 weeks or more) fell by 269,000 in July to 1.1 million, the same level as in February 2020. The long-term unemployed accounted for 18.9 per percent of the total unemployed in July.
