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Job report for August 2022:

Job growth unexpectedly spikes in August as the number of jobs increases by 315,000.

Nonfarm payrolls rose strongly in August in an otherwise slowing economy, but the Bureau of Labor Statistics said on Friday that unemployment rose as more workers returned to the workforce. reported an increase in rates.

The economy added 315,000 jobs in the month, just below the Dow Jones estimate of 318,000. The unemployment rate he rose to 3.7%, two-tenths of a percentage point above expectations. The broader unemployment rate, which includes disengaged workers and those working part-time for economic reasons, rose to 7% from 6.7%.

Wages continued to rise, but were slightly below expectations. Average hourly wages increased by 0.3% month-on-month and 5.2% year-over-year, both 0.1 percentage points below estimates.

Professional and business services led the payroll increase at 68,000, followed by healthcare at 48,000 and retail at 44,000. Leisure and hospitality, which have been key sectors for the job recovery during the pandemic, have increased by just 31,000 in one month, up from an average of 90,000 over the past seven months in 2022.

Manufacturing increased by 22,000, financial activity increased by 17,000, and wholesale trade increased by 15,000.

The employment numbers are causing embarrassment for the Federal Reserve, which is trying to keep inflation in check.

Chief investment strategist Liz Ann Sonders said, “At a unique time when the labor market remains relatively tight, even though there is still job growth, companies have begun to announce hiring freezes, Some companies are announcing layoffs.” at Charles Schwab. “If we don’t see the carnage in the labor market like we see in most recessions, then this is very likely a recession.”

The rise in labor costs and wages comes amid soaring inflation and fears of an economic slowdown that has led to negative GDP in the first two quarters of the year, generally seen as clear signs of a recession. is regarded.

Inflation is at its fastest pace in more than 40 years, driven by imbalances in supply and demand, massive stimulus from the Fed and Congress, and a war in Ukraine that has pushed the cost of living skyrocketing.

The Federal Reserve has battled inflation with a series of rate hikes totaling 2.25 percentage points expected to last through next year. In recent days, key central bank figures have warned that they have no intention of reversing their tightening policy, and even if they stop raising rates, they expect rates to remain elevated “for some time.”

One of the key channels through which the Fed seeks policy impact is the job market. In addition to strong employment, vacancies outnumber available workers by almost two to one, putting pressure on wages and costing not only gas and food, but shelter costs and a variety of other miscellaneous items. It creates a feedback loop that drives up the cost price.

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