While recession has not set in yet, it may not be too far away either feel some experts. At a time when economists were expecting only about 2.5 lakh jobs to be added, the US jobs market has surprised everyone by adding over 5.28 lakh jobs in July. Unemployment has actually dropped to 3.5 per cent amidst inflationary conditions and fears of recession.
In June, only about 3.88 lakh people had got jobs.
As per recent data from the Labour Department, the US appears to have regained the about 22 million jobs that were lost two years ago, when the pandemic had struck. The unemployment rate is also at a low.
However, the gross domestic product, which is the broadest way of assessing economic output, dropped in quarter one and two. Inflation remains at a high. In fact, it is the highest in 40 years.
These are conditions similar to what existed at the time of recession in 1969. That means, recession may not have been averted altogether. However, the bigger worry in the US right now seems to be inflation.
Meanwhile, fears of recession have gripped countries worldwide. Britain is expecting to go into recession by end of the year. Europe too is steeped in uncertainty, with the Ukraine war only fuelling fears, especially after adversely affecting oil and gas supplies. If gas supplies are completely stopped by Russia, Europe will have to brace for a tough winter, with gas being rationed.