While there has been much talk of a pending recession, as the Federal Reserve takes steps to curb high inflation, recent reports on the health of the economy show that it is cooling but still strong. This is good news for the White House, as the American public is increasingly concerned about the rapid speed with which prices are rising.
Thursday, the Department of Labor published data on weekly unemployment claims, the most timely data on the health of the economy, which showed that new claims fell unexpectedly last week. The next day he showed a report from the U.S. Bureau of Labor Statistics Strong employment growth continued in May.
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State unemployment benefits have fallen to the lowest level since 1969
Two years after the covid-19 pandemic plunged the US economy into a free fall, causing an increase in unemployment to almost 15 percent, the U.S. has almost returned to peak employment in February 2020. Strong labor demand has created a labor shortage with 11.4 million jobs open to the entire economy, more than the number of unemployed.
Thursday’s report saw initial applications for unemployment benefits, a general indicator of layoffs. falling from 11,000 to 200,000 during the week ending May 28th. Economists had predicted that applications would drop by just 1,000 last week. The four-week average, which equals part of the weekly volatility, reduced claims to 200,000, a drop of 500 from the previous week.
In the United States, the number of Americans receiving unemployment benefits after an initial week of aid fell by 34,000 during the week ending May 21. At $ 1.309 billion, it was the lowest level since December 1969 for continued claims.
“Despite the global challenges we face, America is on the move,” President Biden said in a statement on unemployment claims data. “Since I took office, the number of Americans who depend on unemployment benefits has fallen by 95%, and our economy has added 8.3 million jobs. “
Signs of recession have not yet manifested
Fed officials have changed their minds, taking a hawkish stance on inflation, that many had although it would be transient, with the first 50 basis points of increase since 2000. The central bank is expected to make similar one-day rate hikes at each of its upcoming meetings this month and in July.
As interest rates rise sharply, along with other global concerns, such as a slowdown in China and the ongoing Russian invasion of Ukraine, has hit Wall Street indices, companies continue to hire workers in higher-than-expected numbers. The latest employment report recorded 390,000 new jobs created, well above the expected 325,000 increase.
The good thing about the strong growth in employment was that it was less than the more than 400,000 jobs that the economy has added every month for the last 12 consecutive years. Part of Biden’s stated three-part plan to deal with inflation is “The transition from a historic recovery in employment to stable and stable economic growth.”