Recession concerns mount up
Despite the US adding 528,000 jobs in July, The Conference Board’s Employment Trends Index saw a drop, showing signs of slower job gains ahead. The organization also showed concern about a possible recession.
July’s Employment Trends Index level of 117.63 dropped from June’s downwardly revised reading of 118.71.
It is thought that slower job gains are likely to bring the labour market in line with the rest of the economy, which Is already seeing a slowdown in activity. The Conference Board, however, expects the US unemployment rate to remain below 4.5% in 2023. It was 3.5% in July.
Frank Steemers, Senior Economist at The Conference Board, said: The Employment Trends Index declined in July and has now been on a downward trend since March 202. While the US labour market is currently still robust, the recent behaviour of the index signals that slower job gains should be expected over the next several months.”
“It is increasingly likely that the US economy will fall into recession by year end or early 2023, with the Fed expected to continue raising interest rates rapidly over the coming months.”
“While businesses are currently still struggling with severe labour shortages, they may soon see some reduced pressure in recruitment and retention difficulties as economic activity cools.”