Workers are seen in a coffee shop in Washington, D.C., the United States, on May 6, 2022. (Photo by Ting Shen/Xinhua)
Analysts said the numbers signaled strong demand, but also indicated a hot labor market that could spur another large Federal Reserve interest rate hike.
by Matthew Rusling
WASHINGTON, July 8 (Xinhua) -- The United States added more jobs than expected in June, but it remains unclear whether the economy will avoid a hard landing, amid fears of inflation and rising interest rates.
U.S. employers added 372,000 in June, and the unemployment rate remained unchanged at 3.6 percent, near a 50-year low, according to the U.S. Bureau of Labor Statistics' monthly jobless figures released on Friday.
Analysts said the numbers signaled strong demand, but also indicated a hot labor market that could spur another large Federal Reserve interest rate hike.
That comes amid fears from investors, analysts and economists that if the Fed acts too boldly to tame record inflation, a recession could occur.
The jobless figures "help to relieve some of the imminent anxiety (among those who believe) that we're already in a recession," James Paulsen, chief investment strategist of The Leuthold Group, a U.S. investment research firm, told Xinhua.
The significant job growth over the first six months of this year is "just simply inconsistent with anybody's definition of recession," Paulsen said, referring to growing recession fears among some economists and media.
"To me it's very clear the economy is slowing down ... but it also isn't falling apart," Paulsen said, adding that there are weak parts in the economy but there are strong parts too.
"So to me this gets pretty close to the soft landing scenario," Paulsen said.
Ordinarily, all-time lows in unemployment would be a positive development. However, the United States is seeing the fastest rate of inflation in 40 years, which prompted the Fed recently to hike the benchmark cost of borrowing by the most in 28 years.
"It was a strong employment report that raises the probability of an aggressive (Fed) action," Brookings Institution Senior Fellow Barry Bosworth told Xinhua.
Visitors try food samples at the National Restaurant Association Show in Chicago, the United States, May 22, 2022. (Photo by Joel Lerner/Xinhua)
That echoed growing fears that an aggressive rate hike could slow the economy, and even plunge the economy into recession.
Even Fed Chair Jerome Powell recently said that recession is "certainly a possibility" though "it's not our intended outcome at all."
Some economists, meanwhile, noted the monthly unemployment report could be misleading.
Looking beyond the U.S. jobs numbers showing a persistently strong labor market, other economic data are telling a "worrisome story" of an economy that could be entering into recession even while the underlying inflation rate remains very high, according to a Peterson Institute for International Economics analysis published Friday.
The U.S. economy is estimated to have shrunk at an annual rate of 1.2 percent in the second quarter, according to the Federal Reserve Bank of Atlanta's GDPNow model updated Friday.
With a first-quarter decline of 1.6 percent, a second consecutive quarter of negative growth would meet the technical definition of a recession.
Others, however, said fears of recession are exaggerated, and that the economy is headed for a soft landing. They note a number of factors including low unemployment and continued spending.
Bank of America said consumer spending continues to signal resilience, despite skyrocketing inflation. Credit and debit card spending increased 11 percent, compared with a year earlier, the bank said Thursday. ■
