Slightly cooling job growth is another sign that the US may avoid a recession.
In August, US job and wage growth slowed down and unemployment was up, according to the US Bureau of Labor Statistics. While that might not be great news for workers — as the unemployment rate is now up to 3.8 percent from 3.5 percent — it’s a signal that the Federal Reserve’s plan to get inflation under control and avert a recession appears to be working.
That’s because the Fed sees high job and wage growth as a contributor to inflation: “The reduction in average job and wage growth is exactly what the Federal Reserve wants to see,” said Dante DeAntonio, senior director of Moody’s Analytics. “The Fed largely views the labor market as the most important battleground in its fight against above-target inflation.”
The US added 187,000 jobs over the last month. It’s more than expected, but it’s still below the key figure of 200,000 — a number that had not been crossed for 29 consecutive months before June. Hourly earnings rose 4.3 percent, which is still above wage growth at this time last year. DeAntonio said that he expects wage growth to fall in the next few months. Overall, he said, the Fed would like to see wage growth at 3.5 percent or lower.
President Joe Biden touted the numbers during an address at the White House Friday. He’s been trying to invoke “Bidenomics,” a term encompassing his vision for the US economy, as a selling point for his 2024 reelection campaign — and as a weapon against his Republican rival, former President Donald Trump.
