Job growth slows, flashing warning signs for businesses and Kamala Harris’ campaign
In less than two weeks, the economy has cut short Vice President Kamala Harris’ honeymoon.
A weaker-than-expected hiring rate in July rekindled fears of a possible recession. The unemployment rate has risen to 4,3%, its highest level since October 2021. 7,16 million people, or 7.16 percent of the population, are currently unemployed. This is also the highest number in almost three years.
Despite the fact that inflation is lower than its peak of four decades in June 2022 (when it was at its highest), consumers pay 19% more on goods and services compared to early 2021. Democrats’ massive spending during the first two years under the Biden administration is blamed for the high prices and interest rates that are hurting businesses and households.
As prices rose and credit card debt increased, Ms. Harris and President Biden could point out that unemployment rates were less than 4%. This silver lining has now disappeared.
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Intel announced that it would cut 15% of its workforce or 15,000 jobs to become more competitive.
Investors responded to news of rising unemployment with a massive sale on Friday. The S&P 500 closed at 5,346 after losing 100 points or 1.8%.
Elizabeth Warren, a Massachusetts Democrat senator, said that the data on jobs “is flashing in red.”
She called on Federal Reserve chairman Jerome Powell via social media to “cancel [his] summer vacation and reduce rates now”, instead of waiting until September to act.
This is not good news for Ms. Harris. She was elected the Democratic Presidential nominee the day after the Labor Department released its alarming jobs report. Ms. Harris will inherit the “Bidenomics,” whether she wants to or not. Republicans have tagged her with “Kamalanomics.”
Alfredo Ortiz is the CEO of Job Creators Network. He said that the U.S. jobs market has “significantly downshifted,” because the consumers who drive the U.S. economy “are tapped-out from the ongoing cost of living crisis under the Biden and Harris administration.”
“Conservative growth policies like tax cuts, deregulation and domestic energy production will empower Main Street job-creators to restore shared prosperity,” said Mr. Ortiz.
Corina Morga, President of Baltimore’s CR Construction Services said that the nonresidential building construction industry has been under greater strain.
In an interview, she stated that “what would be worrying for us is what will happen over the next half-year.” If these trends continue, we’re headed for a recession. It will be difficult to fill up the pipeline with contracts, let alone staff them, finance them or fund them. This part depends on what the Federal Reserve does with its rates.”
She has noticed the impact of inflation on her company’s profit margins and costs.
Ms. Morga stated that the uncertainty created by this legislation would be detrimental to our industry. “I already have to deal with paying people more for their basic needs because they can’t afford them,” Morga said. This puts me at a disadvantage when it comes to competing with my competitors. As a businessman, you must ask yourself at some point if the deal is worth it when the margins are low or if the cost of operating the company will be reduced.
Bharat RAMAMURTI, former economic advisor to Mr. Biden said: “It is not the time to panic.”
He said that the Fed made a mistake by not cutting rates in July. It should correct this mistake in September, with a rate cut of at least 50 [basis point] or higher.
The Harris campaign argued that the economic performance of the Biden-Harris Administration is superior to the Republican Party’s nominee, former President Donald Trump. The campaign cited the creation of nearly 16 million new jobs in just 3 1/2 years. This includes the recovery from pandemic locking down policies.
In a press release, the Trump campaign stated that “Donald Trump’s economic record was the worst in modern American History.” “The unemployment was 6.7% in Trump’s final full month as president [December 2020]; 10 million Americans had no jobs.”
Karoline Leavitt, Trump’s national press secretary, said that Ms. Harris had “cast tie-breaking Senate votes for spending that has put inflation on steroids and despite evidence that America’s working families are suffering she says that these failed plans are effective.”
“The basic necessities such as food, gas, and housing are becoming less affordable. Unemployment is on the rise, and Kamala does not seem to be concerned,” said Ms. Leavitt.
Labor Department reported that 114,000 new jobs were created in the month of July. This is about a third less than expected.
The government has also revised down the payroll gains for each of May and June by 29,000 positions. Employers have added an average of 203,000 jobs per month so far this year. This is down from 251,000 in the previous year, 377,000 by 2022, and 604,000 in 2021 when the job market was roaring back after the pandemic.
Mr. Ortiz stated that more than two thirds of new jobs created in July came from “the unproductive government and quasi-government sectors of health care and social service.”
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