Your Evening Briefing: There’s No Slowing Historic US Employment

US unemployment is at a five-decade low. As in, lower than it’s been since the days when “Watergate” referred only to a building. In June, almost 400,000 jobs were added, far more than predicted and a clear illustration of the extreme tightness of the labor market. But a look beneath the surface of the June employment report and other recent data shows just how hot it really is. “Our private sector has now recovered all of the jobs lost during the pandemic, and added jobs on top of that,” President Joe Biden said Friday. But while the White House is happy to tout its pandemic rescue package and other recovery policies as key reasons for the historic numbers, high inflation fueled in part by Russia’s war on Ukraine has made all those gainfully employed Americans both a blessing and a curse. Economists had foreseen a more moderate increase, which in turn led some on Wall Street to predict less reason for the Fed to move as quickly with plans to raise interest rates—and thus presenting less risk of a hard landing. But with Friday’s data, and a potentially grim report on consumer prices next week, a sanguine central bank is no longer considered likely when it comes to rate hikes. “You can pretty much count on 75 basis points in July,” said Jim Caron, chief fixed income strategist with Morgan Stanley Investment Management. “The job market is strong and it’s not giving up any growth.”

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.