August 10, 2022
Although earnings season has yet to arrive, the latest month’s jobs figures are already here — and they offer a contrasting view from analysts on America’s decline into recession.
Hiring slipped in June, during which employers added 372,000 jobs. In May, employers added 390,000; in April, that number was 428,000. In that sense, it’s easy to see how people could see this report as a continuation of a downtrend. However, jobs growth came in significantly higher than estimated: analysts expected just 250,000 jobs.
With that, the economy inched closer to pre-COVID employment figures. The unemployment rate sat at 3.6%.
Employment in the professional and business services sector rose +74,000. Other industries experienced strong growth as well, including leisure and hospitality (+67,000), health care (+57,000), and transportation and warehousing (+36,000), among others. Retail trade, construction, financial activities, other services, and government jobs all reported little change in the period according to data from the Bureau of Labor Statistics (BLS).
The BLS also observed that employment was still roughly -0.3% below its pre-pandemic level. However, the private sector had completely recovered its job losses; it was the government’s loss of more than half a million jobs that pulled on this figure. However, this makes sense given the enormous impact that the market had on the retirement plans of Americans.
This report, amid the backdrop of analysts’ warnings about recession and weak economic performance, offers a second opinion on America’s economy. While markets are down more than -20% YTD and inflation is up more than +8% YoY, the economy appears to be foundationally strong.
This contra-narrative feels particularly bullish for the economy, which is distinct and separate from markets, but also has a relationship with it. We cannot predict if this trend of strong jobs growth will continue through the Summer, but the persistence of America’s job market has offered a lot of contrast with the prevailing narrative about the state of the economy.
Simply put, it’s doing better than most financial media makes it out to be.