A Robust June Jobs Report Clouds Outlook for US Economy

Associated Press (07/08/22) Rugaber, Christopher

The strong hiring report for June has eased fears that the U.S. economy might be on the cusp of a recession. Yet the government’s figures also spotlighted the sharp divide between the healthy labor market and the rest of the economy. The contrasting picture suggests an economy at a crossroads. Strong hiring and wage growth could help stave off recession. Or, conversely, inflation and steadily higher borrowing rates engineered by the U.S. Federal Reserve could discourage consumer and business spending and weaken growth, eventually leading businesses to scale back hiring or even cut jobs.

For now, the latest jobs data from the U.S. Department of Labor shows that many businesses still want to keep hiring. The increase in jobs in June was surprisingly robust and in line with the pace of the previous two months. Economists had expected job growth to slow sharply last month given the broader signs of economic weakness. The unemployment rate, which was unchanged, continues to match a near-50-year low that was reached before the pandemic struck in early 2020.