The economy added 187,000 jobs in August, slightly above what the market had predicted. And while unemployment also increased, it is still not too far from a 50-year low, according to the latest employment report from the Bureau of Labor Statistics (BLS).
August’s job growth was seen across several industries, primarily driven by health care, leisure and hospitality, social assistance and construction jobs, according to BLS.
The unemployment rate rose by 0.3 percentage points in August to 3.8%, up from the 3.5% recorded last month. The jump means an additional 514,000 lost their jobs in August, bringing the number of unemployed people in the country to roughly 6.4 million. The unemployment rate has ranged from 3.4% to 3.7% since March 2022, according to the BLS.
Wage growth increased by 0.2%, a similar rate as the previous month. Over the past 12 months, average hourly earnings rose by 4.3%.
“The report also suggested that wage growth — a key concern for Fed policymakers — is moderating,” Jim Baird, Plante Moran Financial Advisors’ chief investment officer, said in a statement. “Average hourly earnings rose by 0.2% for the month, a pace that should be much more palatable to the Fed as they work to get the inflation genie back in the bottle.
If you are looking to reduce your expenses amid today’s economy, you could consider using a personal loan to pay down debt at a lower interest rate, saving you money on monthly payments. Visit Credible to find your personalized rate without affecting your credit score.
THESE TWO FACTORS COULD BE DRIVING YOUR CAR INSURANCE COSTS UP
Fed could be swayed to pause on interest rate hikes
A cooling jobs market could be the ingredient needed to get the Federal Reserve to hit pause on an additional interest rate increase this month, according to Baird.
“The bottom line? Labor conditions continue to cool as the tangible effects of the Fed’s inflation playbook filter into the real economy. For now, the slowdown hasn’t reached stall speed, and the economy remains on a growth trajectory,” Baird said. “Whether or not that can be sustained will depend on the degree to which prior rate hikes weigh further on growth and the extent to which policymakers deem additional tightening is needed to ensure a return to the Fed’s inflation target.”
Fed chair Jerome Powell said last week at the Kansas City Fed’s conference in Jackson Hole, Wyoming, that while inflation has moderated, it remained too high, and central bankers were prepared to tighten more if necessary.
In July, inflation rose to 3.2%, still above the Fed’s 2% target rate. The central bank has raised rates 11 times since 2022 to bring inflation down to its target rate.
If you’re struggling in today’s economy, one way to lower your spending is by saving money on your car costs. You could consider changing your auto insurance provider to get a lower monthly rate. Visit Credible to shop for your personalized premium and get pre-approved in minutes.
MORE STUDENTS TURNING TO FEDERAL AND PRIVATE STUDENT LOANS TO FINANCE COLLEGE: SURVEY
Recession risk off the table for now
The upbeat jobs report has renewed belief that the U.S. economy may be able to skirt a recession, according to Baird. Unless evidence of a more pronounced slowdown leading to more significant job losses emerges, “there appears to be enough good news to keep near-term recession worries at bay for now,” Baird said.
Matt Schoeppner, a senior economist at U.S. Bank, said economic growth is likely to slow, but a recession isn’t on the cards.
“It seems likely the economy may avoid a recession, but we expect that real GDP growth will remain modest in the near term,” Schoeppner said in a statement. “It might qualify as what we call a ‘growth recession,’ where we see a slow economy, but with few ramifications for the job market.”
If you’re concerned about rising interest rates, you could consider paying down high-interest debt with a personal loan at a lower rate. Visit Credible to get your personalized rate in minutes.
HOMEBUYERS ARE FINDING BETTER DEALS IN THESE CITIES, SURVEY SAYS
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
Read the full article here
