Unemployment rate climbs to a peak not seen since late 2021, settling at 4.3% in the United States.
U.S. Labor Market Slows Down, Economists Warn of Recession Risk
The U.S. labor market is showing signs of a slowdown, with only 22,000 new jobs created in August 2022, according to the latest employment report. This figure, a significant drop from previous months, has raised concerns among economists, who are warning of a potential recession.
Economist Sam Kuhn describes the labor market as practically frozen and believes there is a risk of a recession. The weakening of the labor market is partially attributed to Trump's global tariffs and tough immigration policies, which have limited hiring and contributed to the current state of the economy.
The unemployment rate in the United States has also risen, reaching 4.3% - the highest since October 2021. This is a concerning development, as the American employment engine, which had shown resilience for years, is now stalling.
The report highlights a rapidly cooling economy in the U.S., with June's employment data being revised down, reflecting a loss of 13,000 jobs. The White House has described the employment report as "a bit disappointing."
Despite these concerns, President Trump remains optimistic about the upcoming employment data. However, his optimism contrasts with the views of economists like Sam Kuhn. The president has also criticized Federal Reserve Chair Jerome Powell for not lowering interest rates earlier, stating that Powell is "Too Late!" on his Truth Social account.
The chairman of the U.S. Federal Reserve, Jerome Powell, has been a target of President Trump's criticism. The president's concerns about the Federal Reserve's actions have not been met with agreement from economists, who predict that the Federal Reserve will cut interest rates at an upcoming monetary policy meeting scheduled for late September.
According to BofA Global Research, the Federal Reserve is predicted to make two 25 basis point cuts, one in September and one in December. However, the potential interest rate cuts are not causing immediate concern at the White House.
The weakening of the labor market and the potential recession risk have led economist Sam Kuhn to describe the current state of the economy as significantly different from what it was just two years ago. This is the first time since December 2020 that there has been a job loss in the United States, a stark reminder of the challenges facing the economy.
As the labor market continues to struggle, economists and policymakers will need to work together to find solutions to address the current economic downturn and prevent a potential recession. The future of the U.S. economy depends on it.
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