US Job Growth Tops Forecast, Unemployment Falls to 3.5%

    Photo: AP [via Politico]

    The Facts

    • US employers added 528k workers to their payrolls in July, surpassing the forecasts of economists and dropping the unemployment rate to 3.5%.

    • The monthly job numbers exceeded the 258k job growth prediction by Dow Jones, with wage growth also rising by 0.5% for the month and 5.2% over the last year.

    The Spin

    Narrative A

    The stunning job growth numbers make it even tougher to determine whether the US is really slipping into a recession. Despite the slowing down of the post-pandemic boom, the strong job market is a good forward indicator for the US economy.

    Narrative B

    The labor market isn't the reason why the US has suffered from inflation, but it will be part of the reason why it will be difficult to escape. The continued gains in jobs and wages are fundamentally at odds with the central bank's goal of price and wage stability. Inflation continues to soar and the economy remains overheated.

    Nerd narrative

    There's a 50% chance that the average US unemployment rate will be at least 4.96% between 2022 and 2024, according to the Metaculus prediction community.

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