August 5, 2022
There’s no way to take the other side of this … For the economy, this is good news.Liz Ann Sonders, chief investment strategist at Charles Schwab, on the better than expected jobs report.
- The economy added 528,000 jobs last month; unemployment rate = 3.5%. The job creation happened across many industries – you can see where in this chart.
- Why This Matters: The report reflects strong job growth, that handily beat expectations by economists for only 258,000 jobs created and an unemployment rate of 3.6%.
- Wages also increased. This tends to be perceived as a positive sign for consumers but also reflects continuing inflation (when wages can't keep up with price increases).
- Stocks dropped in part because investors saw the rise in wages as a sign the Federal Reserve will continue to raise rates to counter inflation – rising rates can slow business activity.
- Overall: Positive news on the job market. Negative news in that signs continue of rising inflation. Somewhat confusing picture of an economy with job growth but negative economic growth (negative GDP). As with most stories, we'll have to wait and see how this story develops!
by Jenna Lee,