The US economy appears to be at an economic tipping point, with some experts warning of a potential recession. While there’s still a positive outlook, the recent job growth numbers suggest that the economy may be slowing down.
For months, economists have been tracking a decline in hot economic metrics, which have returned to pre-pandemic trends after being boosted by massive tailwinds. However, this normalization has flattened out due to increased uncertainty and tight monetary policy.
The latest jobs report revealed just 73,000 new job creations in July, with the three-month moving average at a paltry 35,000. This indicates that the labor market is growing by only 0.02% per month, far from the pre-pandemic growth rate.
According to Nicholas Colas, co-founder of DataTrek Research, the below-consensus job growth number “reflects a US economy closer to a tipping point than markets or the Fed previously thought.” He added that monthly job growth hovering around zero for several months is an early recession indicator.
Job creation remains one of the most important indicators of economic growth. As such, this slowdown in job growth suggests that the economy may be heading towards a recession.
Source: https://www.tker.co/p/economic-growth-slowing-approaches-tipping-point