Friday, August 5, 2022
It wasn’t the hottest growth in jobs ever, but it was big and exceeded the pre-pandemic average job growth. Employers added 528,000 workers to their payrolls in July, and 2.79 million over the past three months. Wages jumped, but less than raging inflation, and the number of unemployed people actively looking for work fell to the lowest since the year 2000, at the verge of the dotcom bust.
It was a shock-and-awe disappointment for the recession mongers out there that want a recession more than anything because, according to their thinking, it would “force” the Fed to pivot and start cutting rates – despite what the Fed actually says – and end this horrifying QT in a market that is addicted to QE and will suffocate under QT. They want the Fed to reverse the tightening though it has barely started (way too late), so that stocks can continue to get inflated to the moon.
Someday we’re going to get a recession – eventually there always is one. Knuckling under this raging inflation will likely require a recession, yet a shallow recession might not be enough to get the job done as this inflation is getting more and more entrenched.
But it’s just very tough to have an official recession with this type of labor market, with employment growing and wages growing sharply, and with unemployment falling.
Some people want there to be a recession because it will make the Dems look bad just in time for November elections. Perhaps they want it to linger until 2024 so they can elect a Republican.
The job market may look strong now, but it would be a miracle if it stays strong. But no one would be happier than I if it does; I just don't see how it can.