JULY 11, 2022 – EMPLOYMENT HOLDS STEADY IN THE FACE OF A SLOWING ECONOMY
The US economy added 372,000 jobs in June extending a strong streak of gains despite the signs of a slowing economy. The average rate of new jobs added for the last three months is 400,000. The unemployment rate remained at 3.6%, holding at that level for the last 4 months. Jobless claims have gone up slightly but remain historically low.
Average hourly earnings grew 5.1 percent year-over-year in June, slightly down from earlier levels. The strong jobs report is likely to keep the Fed on track for another 0.75 percent increase in rates this week.
Some economists think the US is already in a recession, other believe it will arrive next year. GDP fell at a 1.6 percent annual rate in Q1 2022, and Wall Street is estimating another 1.2 percent contraction in Q2.
The Fed has stated their primary objective is curbing inflation. Rates will go up this month and probably again in September. If you act now, it is possible to lock in the lower rates now using interest rate hedges.