The employment engine continues to excite in the United States

Last May almost 340,000 workers joined the labor marketl, defying the threat of recession that still hangs over the US economy. The employment activity pushed up the stock market, provoked euphoria from the government and showed the strength of a market that is growing, at the national and state level, in all sectors except manufacturing.

the recent official unemployment data is from 3’7%, which continues to place the country in a situation of “technical unemployment” or residual, in an inertia that has lasted for several months. Although there has been a rebound in relation to the historical 3.4% reached last month, the data is so good that it raises questions about the real situation of the economy.

He economic growth of the country has slowed down in recent months, as shown by its evolution. Although from July to September of last year the increase was 3.2%, from October to December it went to 2.6% and de January to March continued to decline until 1’3%. This has been the result of the rise in interest rates by the Federal Reserve, in order to slow down the feared and persistent inflation of recent months.

But what nobody expected is that with this situation the employment data would be so firm, returning to figures that had not been seen since 2007, such as the increase in the participation of workers from 25 to 54 years in the labor market, with employment of 83’4%, according to data from american government. The positive trend already reaches 13 of the last 14 months, making one think about the reasons behind it.

Some experts, as suggested Catherine Rampellfrom the Washington Post, point to the return of migrants to the labor market after the collapse suffered during the pandemic. The closing of bordersdue to the public health emergency law, significantly reduced opportunities for a group that usually holds thousands of jobs and that the average American does not want to do, accounting for a fifth of total employment.

The entry of this labor force has helped to revitalize a market in which women considered to be of “optimum age” to work (25 to 54 years old) are currently at their highest point of hiring levels. The closure of schools, nurseries and other types of businesses in which women had to leave their jobs due to Covid, has been left behind, which has led to their reincorporation into the sector.

Employers of large, small and medium-sized companies, as the facts show, are optimistic. If the Federal Reserve remains cautious on raising interest rates after the latest positive inflation data, employment could continue to grow. Layoffs, except in the technology sector, are low and employers have chosen to replace them with the vacancies left by voluntary labor desertions.

However, historically low levels of unemployment and the high number of hirings may favor inflation if companies raise wages to find workers, which could occur in cases of low labor supply. All of this suggests keeping an eye on market developments, especially at a time of international instability with the war in Ukraine in the background.

In fact, the only thing in which there is unanimity among the experts is that the risk of recession is still there. Despite the green shoots, there are indicators that the economy still needs central banks to balance inflationary risks, which will mean having to tighten their pockets for the majority of citizens.

And that in case the intervention of the Federal Reserve is enough to avoid an even worse situation, which could lead to a financial crisis of greater proportions. For now, the buoyant labor market, which has already reached all-time highs, is expected to weaken slightly during the second half of this year. It only remains to wait and see how events unfold.