If the U.S. economy is in recession, someone must have forgotten to tell the job market. The employment picture over the past six months does not look anything like an economy in recession, instead, jobs have been added at a rapid rate of nearly 460,000 a month.

 

Research by CNBC's Steve Liesman shows that during a typical downturn, when the employment picture is much bleaker than it is today, the employment rate will fall, not rise.

 

The CNBC team looked at economic data going back to 1947 and found that when GDP is negative for six consecutive months, as will be the case in 2022, employment falls by an average of 0.5 percentage points. But this year, employment has actually increased by 1%.

 

 

 

Data from relationship software firm UKG supports this view, with internal data showing that the job creation is roughly in line with BLS statistics from the U.S. Bureau of Labor Statistics.

 

Finally, the Federal Reserve Bank of Dallas said in a research note released Tuesday that its analysis of multiple data points found that "most indicators, especially those measuring the labor market, provide strong evidence that the U.S. economy is There was no recession in the first quarter of this year."

 

One data point studied by Fed researchers is the actual PCE. They found that consumption generally fell during recessions. Conversely, in the first half of 2022, the metric has increased.

 

Despite other evidence that this is not the case, many commentators have focused on the traditional definition of a recession: two consecutive quarters of negative GDP growth. A 1.6% decline in the first quarter and a 0.9% decline in the second quarter met that criterion.

 

Another anomaly of the current state of affairs is that economic growth in nominal terms was strong in the second quarter, despite a fall in inflation-adjusted real GDP. Nominal GDP grew by 7.8% over the period but was outpaced by quarterly inflation of 8.6%.

 

By comparison, in the last recession in 2020, nominal GDP contracted by 3.9% and 32.4% in the first and second quarters, while real GDP contracted by 5.1% and 31.2%, respectively.

 

St. Louis Fed President Bullard said he did not think the economy was in a recession, though he was more disappointed by the second-quarter slump. "I think the economy slowed in the first quarter. It may have been a fluke, but the second quarter is more worrying," he said. "Even if growth in parts of the economy that is sensitive to interest rates slows, that doesn't mean that by itself, just because You see some negative signs in certain areas of the economy and you're in a recession."

 

The U.S. nonfarm payrolls report for July will be released on Friday. The U.S. BLS is expected to report an increase of about 258,000 jobs in July, according to Dow Jones estimates. Figures from the BLS earlier this week showed that the gap between job openings and available labour is still large but is gradually narrowing.

 

The Fed believes that there is no recession in the US economy, and good employment is a major reason. This is a big news that is good for the US dollar index and is expected to give support to the US dollar index. Investors need to pay attention to this.