Is the US economy slowing down as hours worked are declining amidst rising unemployment? ✔️ Stratford Management Tokyo Japan

September 5, 2022
Posted by: Stratford Team
Category: Economy

Whether the stock market is a reflection of the state of the economy or not is a long-standing debate. Once it was clear that Fed will shrink its balance sheet and will go for a rate hike to tame the rising inflation, the markets started reacting. The US stock market is already down by almost 20% since the start of 2022. Over the last few days, two key developments took place. Firstly, Fed chair Powell indicated that more pain in the economy is to be experienced, and secondly the August job numbers that showed employment to be lagging behind the estimates.

August job gains were 315000, down from 526,000 in July and below the average gain of the previous three months. The unemployment rate showed a jump to 3.7 percent.

José Torres, Senior Economist at Interactive Brokers is of the view that the recent jobs report confirms a slowing economy as the labor force and the unemployment rate increased while hours worked declined.