The labor market is still hot, and salaries are rising… 4 key points from the July employment report
The labor market is still hot, and salaries are rising… 4 key points from the July employment report

The labor market is still hot, and salaries are rising… 4 key points from the July employment report

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Ministry of Labor report strong JulyRecruitThe data shows that the US labor market is still in a tightening state, according to the Associated Press (AP), and is basically back in the new crown by July.epidemicThe back level is played in contrast to the continuous “falling” sound in the normal environment.irrigatedThere is ongoing new capital, as more people are being employed and wage increases still cannot offset the effects of inflation.

1. The labor market is returning to pre-pandemic levels

Nonfarm payrolls in the US increased by 528,000 in July, well above the 250,000 that academics originally expected; While job demand rumors are news of a sharp contraction, the data is “splashing cold water on these voices,” said Stephen Juno, an economist at Bank of America Securities. This data is a good omen for the US economy and business itself. “

Unemployment fell to 3.5% in July, dropped to the same level in February 2020, on the eve of the Covid-19 outbreak, and the total number of jobs created by employers is higher than it was before the pandemic. Uneven: For example, the service sector is stronger than it was before the pandemic. About a million jobs were added, while the manufacturing sector grew by only about 41,000; Leisure and hotel industry jobs are still about 1.2 million fewer than they were before the pandemic, and government agency jobs are down by about 500,000.

2. All data is “bearish” except for the employment rate

Despite unexpectedly strong employment, the vast majority of the remaining data indicates that the US economy will slip into recession, or even into a recession, such as negative GDP growth for two consecutive quarters, which is a sign of recession. It does not fit any definition. Data such as people’s consumption of goods, business investment, the speed of inventory replenishment, even employers’ willingness to hire, inflation and other data show that the economic outlook will turn negative.

3. Chances of raising another 3 yards by raising the Fed to 70%

But in any case, such a strong employment report may allow the Fed to stay bullish and impose further monetary tightening to curb inflation; The Fed initially expected to raise interest rates three times in September. The odds were 34%, which rose to 70% after the jobs data was released, despite an encouraging report on the fifth, mainly due to weak stocks.

4. Wages have risen 0.5% since June

In July, average hourly wages for employees were up 0.5% from the previous month, and up 5.2% from the same period last year. However, compared to the 9.1% inflation figure in June, the wage increase may not meet the impact of inflation on the public. Some scholars worry if inflation continues to fall, and companies are forced to raise wages. I fear that wages and inflation will show a correlated upward trend, which will hurt corporate revenue performance.

And the

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