Shoppers walk through New York’s Herald Square, outside Macy’s on 34th Street.
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Last week’s negative GDP print worsened recession worries, but other indicators are still strong.
Labor market data reveals companies are still hiring fast and retaining their workers.
Household finances are generally in good shape, and Americans continue to spend big.
Last week’s GDP report painted a gloomy picture of the economy — but far more indicators show the country to be performing just fine.
Though gross domestic product shrank for two consecutive quarters, inflation is at four-decade highs, and Americans’ economic sentiments near record lows, it would be a mistake to ignore several other signs of resilience in the US economy. A handful of indicators — including those closely tracked by the National Bureau of Economic Research, the very organization that calls recessions — show the recovery running strong through the second quarter, albeit at a slower pace than last year.
Consecutive quarters of negative growth are the rule-of-thumb criteria for a technical recession, but NBER actually decides when downturns begin, and its criteria are far more stringent. The NBER’s dating committee defines an economic slump as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
It also looks at a handful of variables that give a more holistic snapshot of the economy than GDP, and those indicators are all in healthy territory.
4 signs that businesses are hiring fast and keeping workers around
Nearly every measure of the labor market shows it to be in robust condition.
Nonfarm payrolls — the most popular measure of overall employment — is the latest indicator to flash an encouraging signal. The US added 528,000 jobs in July, doubling the average forecast and extending the historically strong payroll creation it’s seen throughout 2022.
The gain places total jobs above the pre-pandemic high, signaling a complete rebound from the losses seen early in the pandemic. That recovery happened nearly three times faster than the rebound from the Great Recession, even though the coronavirus recession featured the largest post-war drop in employment.
Unemployment remains historically low as well. The measure fell to 3.5% in July, matching the five-decade low seen before the pandemic.
The unemployment rate is somewhat skewed by the fact that labor force participation remains subdued. The gauge only tracks jobless Americans who are actively looking for work, meaning those outside the labor force aren’t counted. …read more
Source:: Business Insider