US President Joe Biden
File Photo: US President Joe Biden

By Biodun Busari

The United States of America added 315,000 jobs in August to further fortify the economy amid worsening signs.

Economists have forecast the world’s largest economy to go slow with monthly jobs, as the US is still recouping from losses during the COVID-19 pandemic.

However, Financial Times, stated that data published earlier this week has indicated there are still about two vacancies per unemployed worker.

Read also: Trump takes credit as US economy adds 7.5m jobs

The figures released by the Bureau of Labor Statistics, Friday, underline that the labour market remains strong.

Meanwhile, the US jobs market lost 22 million jobs in early 2020 at the start of the pandemic but came back after the COVID-19 lockdowns ended.

The report revealed that the American economy has remained robust despite four-decade high rates of inflation and slowing economic growth.

In July, the US unexpectedly added 526,000 new jobs, restoring employment to pre-pandemic levels.

The unemployment rate marked up to 3.7% in August from 3.5% in July but is still close to a 50-year low. The report also showed more people came off the sidelines in August and started looking for work.

Also, it is noteworthy that the remarkable strength of the jobs market has the Federal Reserve worried that as employers compete for workers, wage inflation will keep driving prices higher.

Average hourly earnings have increased by 5.2% in the last 12 months – faster than the 3% annual growth pre-pandemic but less than the 8.5% annual rate of inflation recorded in July.

Financial Times also said that the central bank has sharply increased interest rates in the hopes of cooling the economy and bringing down prices.

Last week, the Fed chair, Jerome Powell, asserted that the Fed intends to keep raising rates sharply as the central bank struggles to force down inflation.

In a similar manner, the lead US economist at Oxford Economics, Nancy Vanden Houten said there was “much to like in August’s job report” but added that it was unlikely to change Fed policy.

“The modest slowdown in employment growth in August may be welcome by the Fed, but it won’t prevent further sizable rate hikes in the months ahead,” Houten wrote in a note to investors.

Earlier this week the White House press secretary, Karine Jean-Pierre, told journalists that the White House was “expecting job numbers to cool off a bit” as the economy transitions from the “historic economic growth that we saw last year to a more stable and steady growth.”

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