Eric Freedman, CIO of wealth management at the US bank, says that as “we enter the deepest part of summer”, inflation and falling savings will continue to weigh on stocks. consumers and could encourage more people to return to the labor market.
The Labor Department’s monthly jobs report due out on Friday is expected to show U.S. employers hired fewer workers last month than in May, and economists say the slowdown could serve as the latest sign of a recession.
Economists polled by Refinitiv predicted the report would show 268,000 non-farm payrolls added to the payroll in June, the slowest in more than a year and down from 390,000 the month before. .
A man walks past a “hiring in progress” sign posted outside a restaurant in Arlington, Virginia on June 3, 2022. (Photo by OLIVIER DOULIERY/AFP via Getty Images/Getty Images)
The labor market – as well as the economy as a whole – is expected to cool as the Federal Reserve continues its campaign to hike interest rates in a bid to tackle runaway inflation, which is at an all-time high level for 40 years.
JOB OFFERS REMAIN NEAR RECORD LEVELS
But there are growing concerns that the central bank is going too far in slowing demand and pushing the United States into a recession, defined by two straight quarters of negative gross domestic product growth.
Some analysts are pointing to signs that a recession is already here: Last week, the Federal Reserve Bank of Atlanta lowered its second-quarter GDP forecast to -2.1%.
The Federal Reserve Building in Washington, DC ((AP Photo/Patrick Semansky, File)/Associated Press)
The real-time economic gauge known as GDPNOw is not an official estimate of growth for the quarter ending in June, but whether or not upcoming readings from the Bureau of Labor Statistics confirm the economy’s contraction in the second quarter , the technical criteria for a recession will have been met. .
POWELL SAYS THERE IS ‘NO GUARANTEE’ THE FED CAN REDUCE INFLATION WITHOUT HARMING THE LABOR MARKET
The National Bureau of Economic Research (NBER) will make the final decision on whether the economy has entered a recession, which the agency says is characterized by high unemployment, low or negative GDP growth, falling revenues and a slowdown in retail sales.
A “We’re Hiring” sign outside a Walmart store in Torrance, California, U.S., on Sunday, May 15, 2022. (Bing Guan/Bloomberg via Getty Images/Getty Images)
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Initial jobless claims hit a six-month high of 235,000 last week, topping the 230,000 estimate and signaling that the labor market remains tight but demand for workers is cooling.
Megan Henney of FOX Business contributed to this report.
