Construction is booming in states such as Arizona, California, Florida and Texas.
U.S. job growth slowed sharply in July and the unemployment rate unexpectedly rose to its highest level in nearly three years.
The Labor Department said on Friday that employers 114,000 jobs The number of people employed in July rose by 15,000 year-on-year, short of the 175,000 increase expected by economists at LSEG, and the unemployment rate rose to 4.3%, contrary to expectations that it would remain stable at 4.1%.
The unemployment rate reached its highest level since October 2021.
“Temperatures may be high across the country, but the heatwave of summer hasn’t hit the job market,” said Becky Frankiewicz, president of ManpowerGroup North America. “The blanket cooling has wiped out much of the gains we saw from the first quarter of the year.”
The U.S. housing market is “in a tailspin” and could remain so until 2026
Friday’s report added more evidence that the economy is weakening amid persistent inflation and high interest rates. The report rekindled fears of a recession and sent stock futures tumbling. Impending recessionDow futures fell more than 500 points.
The rise in unemployment triggered the so-called thumb rule, which is used as an early indicator of a recession. The rule stipulates that a recession is likely when the three-month moving average of the unemployment rate is at least 0.5 percentage points higher than its 12-month low. The unemployment rate over the past three months averaged 4.13%, and the unemployment rate in July 2023 was 3.5%.
Sarmul has accurately predicted every economic downturn since 1970.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| Me: DJI | Dow Jones Average | 40347.97 | -494.82 |
-1.21% |
| I:Comp | Nasdaq Composite Index | 17194.145335 | -405.25 |
-2.30% |
| SP500 | S&P 500 | 5446.68 | -75.62 |
-1.37% |
Interest rate cuts are on the horizon, but mortgage rates may remain high
“The latest labor market developments are consistent with an economic slowdown, not necessarily a recession,” said Jeffrey Roach, chief economist at LPL Financial Inc. “But early warning signs point to further weakness.”
The weaker-than-expected data also raised questions about whether the Federal Reserve waited too long to cut interest rates, which have remained at their highest levels since 2001 for more than a year.
A construction worker on Wednesday, July 17, 2024, in Raleigh, North Carolina. (Photographer: Alison Joyce/Bloomberg via Getty Images/Getty Images)
The report also included some small revisions: The government said June payroll gains were revised down by a total of 27,000 to 179,000, while May’s gain was also revised down slightly to 216,000.
“The labor market slowdown is now more evident,” said Seema Shah, chief global strategist at Principal Asset Management. “Job gains fell below the 150,000 mark that’s considered consistent with a robust economy. A rate cut in September is a certainty, and the Fed will hopefully not be slow to act this time around.”
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