Please ensure Javascript is enabled for purposes of website accessibility
Employment Market Shows Signs of Cooling Amid Rate Hikes
gvw_ap_news
By Associated Press
Published 2 years ago on
August 4, 2022

Share

 

The employment market appears to have lost some of its sizzle, a development that could influence Federal Reserve policy and further raise concerns about an economic recession among investors.

Job openings have been edging lower since April as rising inflation tightened its grip on businesses and crimped consumer spending. In June, openings fell to 10.7 million, their lowest levels since September. Openings are still at an historically high level, having never exceeded 8 million in a month prior to a year ago.

On Friday, the Labor Department issues its report on hiring for July. Economists expect the report to show employers hired 250,000 workers last month. That would be down from 372,000 jobs created in June and the smallest increase this year. The unemployment rate is expected to hold steady at 3.6%.

The Fed has been aggressively raising interest rates in an effort to slow the economy and cool the hottest inflation in four decades. The central bank has raised its key short-term interest rate to the highest level since 2018.

A key concern from Wall Street is that the Fed’s rate hikes could be too aggressive and push the economy into a recession. Such concerns weighed on stocks for the first half of the year, but the market rallied in July as investors bet the Fed could soon ease up on the pace of the rate increases.

The labor market has remained strong despite inflation’s grip on the broader economy, with job openings far outpacing people seeking employment. A tighter job market could be a signal that the economy is slowing enough for the Fed to be less aggressive. It would also be a sign that inflation itself, particularly with wages, could be easing up.

“We need fewer job openings, which reduces the chances of bidding wars for talent and we’re starting to see that,” said ” Jeff Buchbinder, equity strategist for LPL Financial.

It has been a strong jobs market, though, which helped counter worries that the economy is already in a recession. The economy has contracted for two straight quarters, which is a long-held informal definition of a recession, as spending eases. Economists and analysts have said that strong employment has helped shield the broader economy from slipping into a recession, or at least getting mired in a long recession with a deep impact.

“What we have right now doesn’t seem like (a recession),” said Fed chair Jerome Powell, after the central bank’s most recent policy meeting in July. “And the real reason is that the labor market is just sending such a signal of economic strength that it makes you really question the GDP data.”

RELATED TOPICS:

DON'T MISS

The Cost to Inform California Voters? $118,000 a Page for Official Guide

DON'T MISS

Top Russian Military Officials Are Being Arrested. Why Is It Happening?

DON'T MISS

Delta Tunnel Water Project May Finally Be Nearing a Historic Decision

DON'T MISS

CA Senate Passes Hospital Seismic Compliance Bill: What’s the Impact on Local Hospitals?

DON'T MISS

Take This Memorial Day Quiz Before Warming up the Grill

DON'T MISS

Hate Wasting Money? Use These 7 Hacks to Feed Your Family for Less

DON'T MISS

NCAA and Leagues Back $2.8 Billion Settlement, Setting Stage for Current, Former Athletes to Be Paid

DON'T MISS

UC Berkeley Faces a Summer of Discontent as Gaza Protesters Remain Steadfast

DON'T MISS

Newsom Promised 1,200 Tiny Homes for Homeless Californians. How Many Are Being Used?

DON'T MISS

Fresno Unified Unveils 5-Year Literacy Plan. What Are the Expectations?

UP NEXT

UAW Files Objection to Mercedes Vote, Accuses Company of Intimidating Workers

UP NEXT

American Airlines Retreats After Blaming a 9-Year-Old for Not Seeing a Hidden Camera in a Lavatory

UP NEXT

Stock Market Today: AI Stocks Leap as Interest-Rate Worries Hold Back the Rest of Wall Street

UP NEXT

Portland Nurse Returns Home After Treating Gaza Burn Victims

UP NEXT

RNC HQ Evacuated: Blood Vials Addressed to Trump Prompt Security Alert

UP NEXT

Ex-Employee Kills 2, Injures 3 in Suburban Philadelphia Linen Company Shooting

UP NEXT

Petrochemical Company Fined $30M for 2019 Houston Explosions

UP NEXT

Biden Releases 1 Million Barrels from Northeast Reserve to Lower Gas Prices

UP NEXT

Macy’s Tops Expectations for the First Quarter as Luxury and Beauty Sales Shine

UP NEXT

UN Security Council Rejects Russia-Backed Resolution on Banning Weapons in Space

CA Senate Passes Hospital Seismic Compliance Bill: What’s the Impact on Local Hospitals?

2 days ago

Take This Memorial Day Quiz Before Warming up the Grill

2 days ago

Hate Wasting Money? Use These 7 Hacks to Feed Your Family for Less

2 days ago

NCAA and Leagues Back $2.8 Billion Settlement, Setting Stage for Current, Former Athletes to Be Paid

2 days ago

UC Berkeley Faces a Summer of Discontent as Gaza Protesters Remain Steadfast

2 days ago

Newsom Promised 1,200 Tiny Homes for Homeless Californians. How Many Are Being Used?

2 days ago

Fresno Unified Unveils 5-Year Literacy Plan. What Are the Expectations?

2 days ago

Man Sentenced to 25 Years for Teaching Bomb-Making to Person Targeting Authorities

2 days ago

UCLA Police Arrest Young Man for Alleged Felony Assault in Attack on Pro-Palestinian Encampment

2 days ago

UAW Files Objection to Mercedes Vote, Accuses Company of Intimidating Workers

2 days ago

The Cost to Inform California Voters? $118,000 a Page for Official Guide

What’s the cost of democracy in California? Sameea Kamal CalMatters If we calculate that based just on the pages informing the state’s 22...

15 hours ago

15 hours ago

The Cost to Inform California Voters? $118,000 a Page for Official Guide

15 hours ago

Top Russian Military Officials Are Being Arrested. Why Is It Happening?

15 hours ago

Delta Tunnel Water Project May Finally Be Nearing a Historic Decision

2 days ago

CA Senate Passes Hospital Seismic Compliance Bill: What’s the Impact on Local Hospitals?

2 days ago

Take This Memorial Day Quiz Before Warming up the Grill

2 days ago

Hate Wasting Money? Use These 7 Hacks to Feed Your Family for Less

2 days ago

NCAA and Leagues Back $2.8 Billion Settlement, Setting Stage for Current, Former Athletes to Be Paid

2 days ago

UC Berkeley Faces a Summer of Discontent as Gaza Protesters Remain Steadfast

MENU

CONNECT WITH US

Search

Send this to a friend