Labor Secretary Biden Marty Walsh
- Recession fears were hanging over the economy this summer.
- But the latest job numbers showed higher-than-expected growth, with 528,000 jobs added in July.
- Labor Secretary Marty Walsh said that with a job market this strong, we are not in a recession.
Although the possibility of a recession looms across the country, economic data continues to tell a different story.
“We’re not in a recession,” Labor Secretary Marty Walsh told Insider. “The jobs economy is going very, very well. I see it going for the foreseeable future.”
On Friday, the Bureau of Labor Statistics released its monthly report on the number of jobs the state added — and the report showed a staggering number of payrolls. In July, the US added 528,000 jobs, while the unemployment rate fell to 3.5%, missing expectations. This means that the country has now regained all the jobs it lost during the pandemic.
“Not a lot of people asked me today about the recession,” Walsh said. “I think if you look at the indicators, it’s unlike any other time we’ve had in our country.”
Earlier this week, the BLS job vacancy and labor turnover summary found that in June — the last month they have data for — job opportunities remained high, and a near-record number of workers quit again. This shows that even with fears of an economic downturn, workers can still feel very comfortable changing jobs.
“If it’s a normal economic slowdown, we’ll see inflation, we’ll see job losses, we’ll see people struggling. We don’t see that. Not when you have as many as 500,000 jobs added at a time when the economy is still trying to figure itself out,” Walsh said.
One of those things is definitely happening right now: Inflation remains consistently high, reaching the 41-year level in July. In addition, another release of data has economic watchers nervous: GDP came in negative for the second consecutive quarter. It’s a general technical definition of stagnation, but it’s not the official one.
We will officially be in recession if and when the National Bureau of Economic Research makes an announcement, and NBER says that “a recession involves a significant decrease in economic activity that spreads through the economy and lasts more than a few months.”
One factor in determining the “peaks and troughs”: monthly employment in the nonfarm payroll – which, 528,000 jobs show, is strong.
“I think today’s report helps calm recession fears. The labor market remains one of the pillars of strength, holding the economy back from recession,” Daniel Chow, chief economist at Glassdoor, told Insider.
The jobs report is another feather in the Biden administration’s ceiling as the president’s agenda suddenly rises from the dead. The Inflation Cut Act of 2022 — which aims to lower drug prices and pump billions into climate measures — is set to pass through the Senate this weekend. Recession fears, temporarily quelled, may be good news for formerly faltering Democrats, who still have to contend with price hikes.
“I think we just need to continue to do everything we can to relieve those inflation pressures,” Walsh said.
“This is happening gradually,” he added. “It’s not happening as fast as we’d like it to happen, but inflation has picked up gradually in some ways.”