The U.S. economy added 315,000 jobs in August, close to the 318,000 jobs some economists had expected. That headline figure is a big step down from the 526,000 jobs added to the economy in July, as job growth starts to slow. The unemployment rate, which was expected to remain unchanged, ticked upward to 3.7% as more people joined the labor force.
So is this jobs report good news or bad news? While it indicates the U.S. labor market is still going strong as employers keep hiring, it isn't growing as quickly as it did earlier this year. Getting remarkably candid, Federal Reserve Chair Jerome Powell did warn us that some "economic pain" could be in our future, including a weaker job market.
With job growth slowing and unemployment rising, the U.S. could be inching closer to a recession. And with policymakers at the Fed still dedicated to fighting inflation, Fed funds futures data indicates markets are betting on another jumbo-sized rate hike of 75 basis points at the central bank's next policy meeting later this month. As long as the labor market continues to remain strong, the Fed says the U.S. economy can withstand the economic shocks that rising interest rates will bring.
What does this mean for you going forward? If you're a worker looking for a job, or wanting to get a raise, you could still have some leverage, as job openings far exceed the number of workers. But it might not last too long, so this could be a good time to fill out those applications and ask for a raise. And if you're interested in buying a house or a car, or are carrying any credit card debt, I've got some bad news: Rates on those loans will only get higher.
The upside? Inflation should start to come down, which will (hopefully) bring down the prices of homes, cars, and just about everything else.
- Kristin
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