Despite inflation hovering at a four-decade high, recession deniers took in some good news Friday with July’s job figures. Nonfarm payrolls soared to 528,000 new jobs added for the month, blasting past the Dow Jones expectation of 258,000.
The unemployment rate also improved to 3.5%, better than the predicted 3.6%.
The surprisingly good figures came even as the Federal Reserve implemented another historically large interest rate hike to tighten the money supply.
There were also multiple reports in July of large companies pulling back on plans to hire, and several even announced layoffs.
The Friday report showed the 19th consecutive month of job growth, though some realism must temper the crowing that already came from the White House.
Today’s jobs report shows that the economy added 528,000 jobs in July.
More people are working than at any point in American history. That’s no accident, it’s results.
— President Biden (@POTUS) August 5, 2022
For most of 2020, the economy was virtually shut down, and jobs disappeared in numbers not seen since the Great Depression. When it became clear that the destruction to the U.S. economy had to be avoided, businesses reopened and “job growth” ensued.
Earnings increased for workers in July with a month-over-month average of 0.5%, besting the 0.4% rise in June. However, the numbers are contrasted with inflation, which still sits at a high of 9.1%, a level not seen since 1981.
This continues the trend of paychecks rising substantially since the onset of the COVID-19 pandemic, but there is a catch.
Inflation rates soared due to economic mismanagement by the Biden White House, which resulted from a failure to understand the most basic of economic principles.
Pouring trillions of federal dollars into an already overheated economy had a most predictable effect — runaway inflation. Only the solid Republican resistance along with internal Democratic dissension blocked the ill-planned Build Back Better, and Biden was saved from himself.
Despite the increases in paychecks, the average American is poorer than they were just 18 months ago. Real earnings, rocked by runaway inflation, shrank 1.2% since December 2020.
The Bureau of Labor Statistics numbers will be closely examined by the Fed, along with July’s inflation due to be released on Wednesday. Just how hawkish the central bank will be at its next meeting will be influenced by both critically important figures.