The US economy is still overheating. In March, the number of jobs created (236,000) remained lower than in February (311,000), slightly less than analysts’ expectations, which were for 238,000 creations, according to the consensus published by MarketWatch.
« Job creation continued to grow in tourism and hospitality, utilities, health and business services “Nevertheless specified the Department of Labor in its press release.
Good signs on employment
“The data underscores the strength of the job market, with the economy continuing to create jobs at a rapid pace. But we can see signs of adjustment “, Estimated, in a note, the chief economist for HFE, Rubeela Farooqi. Among these signs, the drop of 1,000 jobs in the industry sector, a sign of ” the destabilizing influence of rising interest rates “, estimated the president of the American Alliance for the industry, Scott Paul, in a press release.
An increase in the number of people who lost a permanent job is observed, as well as a decrease in people returning to the labor market, i.e. who were not in a job and were not looking for one. so far. This last piece of data is moreover one of the reasons for the tensions on the American labor market: although the rate of participation in the labor market is on the rise, at 62.6% of people of working age, it remains below the levels observed before the pandemic (63.3% in February 2020).
Recession expected in the coming months
Unemployment might nevertheless rise in the coming months. This is in any case the conclusion of a survey published on March 27 by the federation of economists NABE (National Association for Business Economics). According to the organization’s president, 53% of panelists “expect a recession at some point in 2023”, Julia Coronado. Nearly a quarter of this panel expects a recession in the third quarter of this year, 5% think that the recession is already underway, 16% see it coming in the second quarter, and 13% in the fourth quarter.
And nearly a quarter don’t expect that to happen until the second half of 2024. If GDP falls, some businesses might be forced to lay off staff or close shop, theoretically increasing the number of unemployed. Already, theU.S. service sector growth slowed more than expected in March since thehe ISM services index fell to 51.2 from 55.1 in February. A figure above 50% signals that activity is growing, while a figure below indicates, on the contrary, a contraction.
The US Federal Reserve (Fed), on the other hand, remains on a growth scenario of 0.4% for 2023 and 1.2% for 2024. As a reminder, it was posted at 2.1% in 2022. The OECD (the Organization for Economic Co-operation and Development) also updated its forecast in mid-March. It is betting on growth of the American economy of 1.5% in 2023 and 0.9% in 2024.
(With AFP)
