Biden's top labor official says with a job market this good, we're not in a recession
- Recession fears have been clouding the economic atmosphere this summer.
- But the latest jobs numbers showed higher-than-expected growth, with 528,000 jobs added in July.
Even as the possibility of a recession looms large over the country, economic data keeps telling a different story.
"We're not in a recession. The economy on the job front is going very, very strong. And I see it continuing for the foreseeable future," Secretary of Labor Marty Walsh told Insider.
On Friday, the Bureau of Labor Statistics released its monthly report on how many jobs the country added — and the report showed a staggering number of payrolls. In July, the US added 528,000 jobs, while the unemployment rate dropped to 3.5%, blowing expectations out of the water. That means that the country has now regained all of the jobs it lost during the pandemic.
"A lot of people didn't ask me today about a recession. I think that if you look at the indicators, this is unlike any other time we've experienced in our country," Walsh said.
Earlier this week, BLS's Job Openings and Labor Turnover Summary found that in June — the most recent month they have data for — job openings remained high, and a near-record number of workers quit once again. That shows that, even with fears of a downturn, workers still feel pretty comfortable job switching.
"If it were a normal economic downturn, we would see inflation, we would see loss of jobs, we would see people struggling. We don't see that. Not when you have a number of like 500,000 jobs added in a time where the economy is still trying to figure itself out," Walsh said.
One of those is certainly happening right now: Inflation remains persistently high, reaching a 41-year benchmark in July. Plus, another recent data release has economy-watchers in a tizzy: Gross domestic product came in negative for the second quarter in a row. It's a common rule-of-thumb technical definition of a recession, but not the official one.
We'll officially be in a recession if and when the National Bureau of Economic Research makes a declaration, and the NBER says that a "recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months."
One factor in determining "peaks and troughs": The monthly nonfarm payroll employment — which, as the 528,000 jobs show, is robust.
"I think that today's report helps tamp down fears of recession. The labor market is still a pillar of strength, holding up the economy out of recession," Daniel Zhao, lead economist at Glassdoor, told Insider.
The jobs report marks another feather in the Biden administration's cap as the president's agenda suddenly rises from the dead. The Inflation Reduction Act of 2022 — which aims to bring down drug prices and pour billions into climate measures — is set to charge through the Senate this weekend. Recession fears getting temporarily quelled could be good news for the previously flailing Democrats, who still have to tackle rising prices.
"I think that we just need to continue to do everything we can to bring down those pressures on inflation," Walsh said.
"That's happening incrementally," he added. "It's not happening as quickly as we'd like it to happen, but also inflation in some ways went up incrementally."
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