Friday’s jobs report may suggest recession worries are rising

Friday's jobs report may suggest recession worries are rising
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The Bureau of Labor Statistics’ monthly government employment picture is expected to show continued strength – a smaller, but still significant, job gain of about 272,700 and the unemployment rate to maintain at 3.6%According to Refinitiv’s calculations.

The report comes after a mixed bag of recent employment data: The latest Job Openings and Labor Turnover survey, released on Wednesday, showed 11.3 million jobs in May, or 1.9 positions for every job seeker, a historic low. levels of redundancies.

While this is good news for job seekers, there are also signs that employers are starting to cut back. New job cut data released Thursday US employers announced 32,517 layoffs in June, a 58.8% increase from the same month last year and the highest monthly rate since February 2021, according to Challenger, Gray & Christmas. However, overall job cuts during the first six months of the year fell 37% from the first half of last year and are the lowest since record hiring began in 1993.
The US labor market is clearly not in recession. However, unemployment may be an indicator of recession. In recent weeks, major companies in the tech and real estate industries have announced layoffs (among them, Netflix, Tesla and redfin) or indicated that they would withdraw from their recruitment plans (e.g PurposeTwitter and Apple).
The details of Friday’s jobs data could help economists, policymakers and business leaders learn whether the recent layoff announcements and hiring freeze were just a fluke. industry-centric adjustments after years of growthcompany-specific one-offs or signs of broader weaknesses.
Historically high inflation prompted the Federal Reserve to act interest rate hike campaign to cool the economy, but these efforts don’t come without a cost: As companies tighten their belts, it usually leads to job cuts.
Fed Chairman Jerome Powell said he knows interest rate hikes could cause “pain” in the labor market, but said he hopes that if successful, the policy-making measures will allow the economy to continue growing by curbing inflation. The recent Fed forecasts In 2024, the unemployment rate will reach 4.1%.

“We’re already seeing some companies start to pull back on hiring by freezing hiring or simply moving more slowly to fill existing jobs,” said Daniel Zhao, chief economist at Glassdoor. “This is the first step companies take when they expect the economy to slow down. In any case, if there is a recession, layoffs are likely to result, but the hope is that if the recession is mild, the layoffs will be contained and any increase in unemployment will be less.” .

More broadly, the U.S. labor market is still in a period marked by incredibly high demand for workers, said Layla O’Kane, chief economist at labor market data firm Lightcast.

“We’re seeing very high openings and very low separations,” he said date of the last JOLTS. “Right now, companies are still looking for a ton of workers and trying to fill those positions. I’d be surprised if the labor market turns into a tough market for workers anytime soon.”

CNN’s Nicole Goodkind contributed to this report.

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