Recession: what Recession?

The August jobs report published yesterday showed that the labour market remained red-hot in July despite expectations job growth would cool as tighter monetary conditions and company layoffs stoked fears of a recession.

Here were the key numbers from the report, compared to economist estimates compiled by Bloomberg:

Non-farm payrolls: +528,000 vs. +250,000

Unemployment rate: 3.5% vs. 3.6%

Average hourly earnings, month-over-month: +0.5% vs. +0.4%

Average hourly earnings, year-over-year: +5.2% vs. +4.9%

Last week I published Recession? Yes, no, maybe…. . The US has seen two consecutive quarters of negative GDP growth, but “a significant decline in economic activity that is spread across the economy and that lasts more than a few months,” is the usual criterion for declaring arecession.

And the latest employment numbers clearly do not meet that definition.

The problem
While the White House and Wall Street may cheer the strong economic numbers, they only make the Federal Reserve’s job more difficult as it belatedly tries to slow the economy. Thus after the announcement on Friday, the odds increased that we will get further large rate increases from the Fed in September and later.

And read these recent articles:

Economic commentary
No, the Federal Reserve does not control mortgage rates
Federal Reserve tries to rewrite history
Has Inflation Peaked?
Have Mortgage Rates peaked?
Are we already in a Recession?
Federal Reserve in Fantasyland: Implications for Housing Market
How far Behind the Curve is the Federal Reserve?
Will the Federal Reserve show chutzpah today?
Why are Mortgage Rates so high?

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  • Andrew Oliver, M.B.E., M.B.A.
    Real Estate Advisor
    m: 617.834.8205
    800 Laurel Oak Drive, Suite 400, Naples, FL 34108
    Licensed in Massachusetts

If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, please contact me on 617.834.8205 or