New Recessional Indicators Will Be Provided By Jobs Report

Jobs report
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According to experts, the Labor Department’s monthly employment report, which is coming out on Friday, is expected to indicate that U.S. firms employed fewer people in June than they did in May.

Refinitiv’s survey of economists predicted that the data would reveal that 268,000 nonfarm jobs were created to payrolls in June, down from 390,000 the month before and the weakest pace in almost a year.

As the Federal Reserve continues its campaign of raising interest rates to combat galloping inflation, which is at a 40-year high, the job market and the economy as a whole are likely to cool.

The U.S. entering a recession, which is indicated by two consecutive quarters of negative gross domestic product growth, is an increasing worry, though, since the central bank may go too far in slowing down demand.

Several experts have identified indicators that a recession is already underway: The Federal Reserve Bank of Atlanta revised its second-quarter GDP prediction downward last week, to -2.1 percent.

GDPNOw, a real-time economic indicator, is not an official estimate of growth for the quarter ending in June, but if upcoming data from the Bureau of Labor Statistics show that the economy shrank in Q2, then the technical requirements for a recession will have been satisfied.

The National Bureau of Economic Research (NBER) will ultimately decide if the economy has entered a recession, which are defined by high unemployment, weak or negative GDP growth, declining income, and sluggish retail sales, according to the organization.

Initial unemployment claims reached a six-month high of 235,000 last week, above the 230,000 projection and indicating that while labor demand is still strong, the labor market is still tight.

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