America’s hiring boom continued last month as employers added a surprising 528,000 jobs despite raging inflation and rising anxiety about a recession.
July’s hiring was up from 398,000 in June. The unemployment rate slipped to 3.5%.
The U.S. economy shrank in the first two quarters of 2022 — an informal definition of recession. But most economists believe the strong jobs market has kept the economy from slipping into a downturn.
The American job market has repeatedly defied skeptics this year. Economists had expected only 250,000 new jobs this month.
There are, of course, political implications in the numbers being released Friday: Rising prices and the risk of recession are likely to weigh on voters in November’s midterm elections as President Joe Biden’s Democrats seek to maintain control of Congress.
The economic backdrop is troubling: Gross domestic product — the broadest measure of economic output — fell in both the first and second quarters; consecutive GDP drops is one definition of a recession. And inflation is roaring at a 40-year high.
The resiliency of the current labor market, especially the low jobless rate — is the biggest reason most economists don’t believe a downturn has started yet, though they increasingly fear that one is on the way. History isn’t entirely reassuring: The unemployment rate was even lower — 3.5% — when an 11-month recession began in December 1969.
The recession is not an American problem alone.
In the United Kingdom, the Bank of England on Thursday projected that the world’s fifth-largest economy would slide into recession by the end of the year.