Jobs Market Slows Again, Triggering A Recession Measure

(MENAFN- Yolo Wire) Signs of slowing in the U.S. Economy increased as hiring slowed in July and missed expectations. The %Unemployment rate jumped to 4.3 percent, and hourly earnings also rose 3.6 percent, the smallest gain in over two years.

Economists had expected 175,000 nonfarm payroll jobs to be added for the month, while the print showed just 114,000 added. Additionally, the jobs count for May and June was revised down by a combined 29,000.

Unemployment rose to its highest level since October 2021, and the labor-force participation rate, the share of working-age people who were employed or seeking work, rose slightly.

The three-month average of the national unemployment rate rising over 0.5 percent from the previous 12-month low has triggered the Sahm rule, a recession predictor that has accurately predicted recessions since the early 1970s. The rule states that if the average unemployment rate over three months rises a half-percentage point or more above the lowest the three-month average went over the previous year, the economy is in a %Recession .

Over the past three months, the unemployment rate has averaged 4.13 percent—0.53 percentage points above the three-month average low of 3.60 percent over the past year. However, economist Claudia Sahm, the rule's namesake, has recently stated that characteristics of the post-pandemic labor market may render the rule less useful in predicting a recession this time around.

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