We Have the July Jobs Numbers

And the initial numbers, which show both jobs and workforce participation increasing at a moderate rate, are being cast as a sign that the Federal Reserve has created the, "Soft Landing," that it desired.

There were 315,000 jobs added in July, and the unemployment rate rose by 0.2% to 3.7%.

Of course, the Fed is giving every indication that it will be tightening the money supply and raising interest rates as aggressively as possible, so I tend to think of this as a Wile E. Coyote moment.  The Anvil still has not landed on the lever and propelled us into a shack full of dynamite:

The tight U.S. labor market loosened some in August as employers hired fewer workers, more people sought work and wages rose at a slower pace.

Employers added 315,000 jobs last month, down from the prior month’s revised 526,000 jobs, the Labor Department said on Friday, with new jobs spread across the economy. The deceleration marked a pullback from robust gains that characterized much of the past two years. Still, job growth remained well above the prepandemic trend.

………

The jobless rate rose to 3.7% in August from a half-century low of 3.5% the prior month. The increase in the unemployment rate reflected more workers entering the labor force. The share of adults working or seeking a job rose to 62.4% in August from 62.1% in July, as participation among women ages 25 to 54 jumped to the highest level since 2000.

The rise in labor-force participation—along with other signs such as lower average weekly hours worked—suggested employers are finding it easier to hire. That could help ease wage pressures in the coming months. The Federal Reserve is closely watching the health of the labor market and wages trends, an important factor in the outlook for inflation.

While total non-farm payroll now exceeds prepandemic numbers, the number of people working is still far less than the trend, and work force participation, even when adjusted for an aging workforce, is still less than the before times.

………

Average hourly earnings rose 5.2% in August from a year earlier, in line with the previous month and down from a recent peak of 5.6% in March. Wages rose 0.3% in August from a month earlier, down from July’s increase.

The figures keep the Fed on track to raise interest rates by either 0.5 or 0.75 percentage point at its meeting later this month to combat high inflation.

As always, the Fed will over-correct.  There are already indications that the bottom has dropped out of the housing market, and the markets for cars and other durable goods have no doubt been impacted by the rate increases as well.

If the Federal Reserve keeps its powder dry for the next few months, which they won't, they might actually get the desired effect.

Fasten your seat belts, we are in for a bumpy night.