Employment fell in the United States in July, with 23,000 jobs lost last month. Economists had forecast that 95,000 new jobs would be created in July.
Although employment fell in July, the unemployment rate edged down over the same period, from 4.2 percent in June to 4.1 percent in July. Analysts say the effects of the US labour market will also be felt in the economies of other countries, CNN reported.
These figures give a mixed picture of the US labour market. On one hand, new jobs fell instead of rising; on the other, the unemployment rate remained relatively low. This has created uncertainty among economists and policymakers about the true state of the labour market.
Some analysts see July’s employment report as disappointing and worrying. Others believe that although hiring has fallen, so have layoffs — meaning that while there is no major crisis in the labour market, the pace of new job creation has slowed.
Another important aspect of the report is that the previous two months’ figures were revised. The actual number of jobs created in the US economy in May and June was a total of 103,000 fewer than previously estimated.
But this does not mean there is a threat of a major recession or mass layoffs in the United States. Consumer spending is still one of the strongest sectors of the economy. Despite war, tariffs and long-standing economic uncertainty, the US economy — worth about $31 trillion — has not fallen into recession.
Some weaknesses in the labour market are visible, however. One reason the unemployment rate fell is that thousands of people have stopped looking for work; they are no longer counted as unemployed and so do not appear in the statistics. At the same time, people’s real incomes are under pressure from inflation.
Employment in the leisure and hospitality sector fell in July. Employment in this sector usually rises during the World Cup, but this time the opposite was seen.
Questions have also arisen about how the rapid spread of artificial intelligence (AI) is affecting the labour market. It is not yet clear whether, because of AI, some people are seeking jobs relatively safe from the technology’s impact, or whether AI is already cutting some jobs.
It is also not yet clear how the weak employment data will affect interest-rate decisions by the US central bank, the Federal Reserve. There is uncertainty over whether the Fed will change its policy on raising or cutting rates based on the new data, and July’s figures could be revised again later.
All in all, the fundamental strength of the US economy is still intact. But because of structural problems such as the cost of living, housing, childcare costs and wage inequality, people’s economic reality has become difficult.
The report presented a contradictory picture of the US economy, the news said: the economy has not yet fallen into a major recession, but the signal that the pace of new job creation has weakened cannot be ignored.
Impact on the world economy
The United States is the world’s largest economy, so it is natural that major changes in its economy will also affect the economies of other countries.
Analysts say the fall in US employment in July could have two kinds of effects. On one hand, if the US labour market weakens, people’s incomes and consumer spending may fall; US import demand would then decline, putting pressure on export-dependent countries. Bangladesh’s garment exports could also be affected.
On the other hand, with the labour market weakening, the Federal Reserve may decide to cut interest rates to increase liquidity in the economy. This could weaken the dollar while boosting capital flows to emerging markets and reducing the cost of foreign borrowing. So the report is both a warning for global demand and a potential relief for financial markets.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report