Jobs report: US labor market unexpectedly adds 528,000 jobs

Despite continued record inflation and a US economy showing signs of slowing, a 212The year-long journey to recover 22 million jobs lost amid the unprecedented economic upheaval caused by the COVID-19 pandemic is over.

National job growth jumped by 528,000 in July, far exceeding expectations and helping to bring overall employment back to levels not seen since February 2020.

A Friday report from the US Department of Labor found that employment increases were widespread and driven by gains in leisure and hospitality, professional and business services, and health care. Total nonfarm employment and the unemployment rate, which fell to 3.5% in July, have returned to pre-pandemic levels, according to new federal data.

As inflation hit a new 40-year high in June, with prices for goods and services up an average 9.1% from a year ago, and US gross domestic product down over In the last two quarters, which is usually the indicator of the start of a recession, employment growth in July came in at more than double the 250,000 that many economists expected.

The surprisingly strong jobs numbers are likely to prompt the Federal Reserve to continue its string of sharp benchmark interest rate hikes as the monetary body seeks to strategically rein in the economy and rein in the inflation.

“If the US economy is in a recession, no one seems to have told employers,” said Sarah House, senior economist at Wells Fargo in Charlotte, North Carolina. Reuters. “We believe this data will give the Fed the confidence it needs to aggressively continue its fight against inflation.”

Some major US companies have recently announced plans to cut their workforces in the coming months, including Walmart, Tesla, Ford and Microsoft, but at the moment the calculations are far in favor of employees who have seen their hourly wages increase by 5 .2 year on year. % in July in the face of a labor sector that currently has nearly two openings for each unemployed person.

While overall employment in the United States returned to pre-pandemic levels in July, Utah was well ahead of the national curve and recovered all of its pandemic-related job losses in December 2020 after hitting an employment low in April that year as pandemic restrictions crushed business. and economic activity.

On Friday, Mark Knold, chief economist for the Utah Department of Workforce Services, said Utah’s healthy economy and a younger-than-average workforce have helped the state to recover from the impacts of the pandemic faster than the rest of the country, but faces an ultra-tight labor market that depends on attracting new workers to the state to fill vacant positions.

“With our 2% unemployment and 4.5% job growth, it’s very hard to keep up,” Knold said. “The people in the jobs fueled by this growth are immigration from Utah. We get labor from out of state that has never reached our unemployment rates because they come here already employed.

Knold said the national workforce is facing a demographic shift that sees older workers leaving jobs at a rate that far exceeds the number of potential young employees available to fill vacancies.

“We’re seeing a tremendous amount of older workers, baby boomers, leaving the workforce without an equal number of younger workers coming after them,” Knold said. “And the pool of potential 16+ workers isn’t really growing. There may be some growth in the next five years, but then it will start to decline. »

Knold said the workforce demographic dilemma is exacerbated by high levels of consumer spending that are pushing businesses to produce more, but without the workforce to keep pace with demand. So even though overall employment in the United States has returned to pre-pandemic levels, it still fails to meet the needs of a still warm economy.

“Usually, part of recessions is because consumers cut back on spending,” Knold said. “And, although a little of that is happening, we are still in conditions where the quantity of desire for goods and services is not satisfied by production. And that won’t be fixed until we see a recovery in labor force participation rates. »

Knold noted that according to Friday’s Labor Department report, the labor force participation rate for July was 62.1%, down from its pre-pandemic level of 63.4. %. This difference, Knold said, helps underscore the current imbalance in the workforce.

“To get back to pre-pandemic participation rates will take about 4 million workers,” Knold said. “But instead, we are losing workers.”

Knold said the shortage of available workers has driven up wages in the state much more significantly than the national average, with the average hourly wage for Utah employees rising 9.5% year over year. the other in March, according to the most recent data available.

Iconic of Utah Lagoon amusement park shared the challenges of thousands of Beehive State businesses over the past 212 years, navigating lockdowns and limited public access during the worst of pandemic-related restrictions that were immediately followed by critical labor issues amid the recovery.

Lagoon spokesman Adam Leishman said the park was thriving but had to recalibrate to compete with other understaffed Utah businesses to fill its some 3,000 seasonal positions.

“It’s been a challenge, no doubt about it,” Leishman said. “We have made significant salary increases to many positions in order to compete with other employers. »

Leishman also noted that a program to connect international students to summer jobs at Lagoon that was put on hold due to global travel restrictions is mostly back in place and the park is set to add additional staff members for its annual and hugely popular Frightmares lineup which is slated to begin in September, before the Halloween holiday.

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