This Week's State Of The Economy - What Is Ahead? - 05 August 2022

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Aug 08, 2022

This Week's State Of The Economy - What Is Ahead? - 05 August 2022

The Good News

The Bureau of Labor Statistics reported this morning that nonfarm payrolls increased 528,000 for the month of July, easily topping estimates, lowering the unemployment rate to 3.5%.  Wage growth also increased 0.5% for the month and 5.2% from the same month last year.  This is the strongest counter-point to concerns we have already entered a recession and is certainly good news for U.S. workers.

 

The Bad News

The Bureau of Labor Statistics reported this morning that nonfarm payrolls increased 528,000 for the month of July, easily topping estimates, lowering the unemployment rate to 3.5%.  Wage growth also increased 0.5% for the month and 5.2% from the same month last year.  This is the strongest counter-point to hopes that the Fed might be able to back-off further rate increases as wage growth and overall economic strength point to continued inflation risks, which erodes consumer buying power and is certainly concerning news for U.S. workers.

It is fair to note that while the factors noted above demonstrate continued strength in the job market, there are other measures of labor market strength have shown signs of slowing.  Nonetheless, the July jobs report puts further pressure on the Fed to act aggressively in its fight against inflation.




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