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Wall Street will be closely watching the new U.S. employment data on Friday, the latest sign of whether the U.S. economy is entering a recession as the Federal Reserve carries out a fight against inflation that aims to slash demand by slowing the economy.
Resilient hiring in recent months has so far withstood a series of borrowing cost increases from the Fed but economists expect that the employment data for July will reveal a marked slowdown.
Evidence of a softening labor market has mounted this week amid layoffs at high-profile companies like Walmart and Robinhood, as well as a government report that showed a steep decline in job openings in June.
The median of economic forecasters anticipate 250,000 nonfarm payrolls were added in July, according to Bloomberg. The figure would mark the lowest monthly gain since December and a significant drop from 372,000 jobs added in June. The unemployment rate stood at a near-historic low of 3.6% in June.
Moreover, the expected figure would signal a departure from the robust hiring sustained over the first half of 2022, during which the economy added an average of 461,000 jobs each month.
“The labor market has been a bright spot in the economy but there are signs that the labor market is clearly cooling,” Daniel Zhao, a senior economist at the career site Glassdoor, .
