Earlier this month, the Labor Department reported that employers added 372,000 jobs in June, a surprisingly robust gain and similar to the pace of the previous two months. Economists had expected job growth to slow sharply last month given the broader signs of economic weakness.
The unemployment rate remained 3.6% for a fourth straight month, matching a near-50-year low that was reached before the pandemic struck in early 2020.
Earlier in July the government reported that U.S. employers advertised fewer jobs in May amid signs that the economy is weakening, though the overall demand for workers remained strong. There are nearly two job openings for every unemployed person.
Though the labor market is still considered strong, other indicators are pointing to some weakness in the U.S. economy. The government said Thursday that the U.S. economy shrank 0.9% in the second quarter, the second straight quarterly contraction.
Consumer prices are still soaring, up 9.1% in June compared with a year earlier, the biggest yearly increase in four decades. In response, the Federal Reserve raised its main borrowing rate by another three-quarters of a point on Wednesday. That follows last month's three-quarter point hike and a half-point increase in May.
Those higher rates have already sent home sales tumbling, made the prospect of buying a new car more burdensome and pushed credit card rates up.
All of those factors paint a divergent and confusing picture of the post-pandemic economy: Inflation is hammering household budgets, forcing consumers to pull back on spending, and growth is weakening, heightening fears the economy could fall into recession.
Though the labor market is still strong, there have been some high-profile layoffs announced recently by Tesla, Netflix, Carvana, Redfin and Coinbase.