The economy added 315,000 jobs last month, down from 526,000 in July and below the average gain of the previous three months.
Job openings remain high and the pace of layoffs low, indicating that most businesses still want to hire and that the economy isn’t likely in, or even close to, a recession. The broadest measure of the economy’s output — gross domestic product — has shrunk for two straight quarters, meeting one informal definition of a recession.President Joe Biden said the economy is not in recession following reports of a second quarter of economic decline. Watch his remarks.
Most economists, though, don’t think a recession will have begun until the unemployment rate has risen steadily. Even so, worries about a forthcoming recession have grown after Fed Chair Jerome Powell, in a high-profile speech last week, made clear that to curb inflation, the Fed was prepared to continue raising short-term interest rates for the foreseeable future and to keep them elevated.
The Fed chair also said the job market is "clearly out of balance," with demand for workers "substantially exceeding" the available supply. Friday’s jobs figures and a report earlier this week that the number of job openings rose in July after three months of declines, suggested that the Fed’s rate hikes so far haven’t restored any such balance. There are roughly two advertised job openings for every unemployed worker.
Consumers have moderated their spending in the face of much higher prices, though they spent more in July even after adjusting for inflation. But companies’ investment in new equipment has slowed, indicating they have an increasingly cautious outlook on the economy.
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