The strong jobs numbers for June will only give the Federal Reserve resolve in its plans to send interest rates ever higher.
The economy added another 372,000 jobs in June — more than 100,000 more jobs than most economists had expected. The better-than-anticipated news gives the Fed a bit more leeway in pursuing big rate hikes because the labor market remains strong enough to act as a bit of a cushion.
That dramatic action comes at a cost — slowing spending. While an economic slowdown is inevitable, the degree to which it slows is the million-dollar question for economists right now. Cailin Birch, a global economist at the Economist Intelligence Unit, said that the report gives the Fed cover for its more hawkish monetary stance, even if other economic indicators aren’t looking quite as hot.
“We think that there are pathways for us to achieve the path back to 2% inflation while still retaining a strong labor market. We believe we can do that,” Powell recently said, although he added that “there’s no guarantee that we can do that.” The National Bureau of Economic Research, a private academic group, defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” Two straight quarters of downward growth are typically seen as recessionary.
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U.S. adds 372,000 jobs in June as job market remains strongThe United States added 372,000 jobs in June, and the data shows professional and business services, leisure and hospitality, and health care industries saw notable increases in workforce participation. abc15
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