AUGUST 7, 2023 – 185,000 NEW JOBS ADDED IN JULY
The July jobs report was released last week which reported the addition of 187,000 new jobs to the US economy. The number was slightly ahead of the 185,000 new jobs reported in June. The unemployment rate fell from 3.6 percent to 3.5 percent, while average hourly wages were up 0.4 percent for the month and 4.4 percent year-over-year.
Economists were expecting the addition of 200,000 new jobs in July, so the data indicates a slight slowing down though far from the long-anticipated shallow recession. The unemployment rate continues to hover at historic lows. The economy has remained resilient in the face of 11 Federal Reserve interest rate increases in less than 2 years aimed at taming inflation.
Fed Chair Powell has warned that the full effect of the interest rate increases has yet to be felt, and worries about the Fed over-tightening continue, which could result in a recession. Following the modest jobs report, there is now an 83.5 percent probability the Fed will not raise rates at their September 16-20 meeting. The Fed has warned it may raise rates another 0.25 percent before the end of the year, but with modest job gains and inflation that seems to be moving in the right direction, it’s likely they will hold off for now. The Bank of America just announced they believe the US can avoid a recession completely.