Warning of the recession: a few industries stimulate employment growth, says Zandi

The latest job report revealed that the American economy added only 22,000 jobs in August with revisions from previous months showing that June has in fact had a decline. Meanwhile, the unemployment rate reached a summit of 4.3% over four years.

In a note on Saturday, Torsten Sløk, chief economist at Apollo Global Management, observed that employment growth in the sectors supported by prices is negative. Manufacturers managed to reduce 12,000 workers last month.

On the other hand, the sectors of health care and social assistance added 46,800 jobs, while the leisure and hotel industry added 28,000. In fact, they made the bulk of work throughout the year, a trend that concerns Mark Zandi, chief economist at Moody’s Analytics.

“What is perhaps the most disconcerting about the labor market by signaling is how it is dependent on health care and hospitality for the growth of little work,” he wrote on Sunday. “Since the beginning of the year, the economy has created a derisory of 600,000 jobs, but without the growth of employment in these industries, there would be no growth in employment.”

The gains from the beginning of the start of the health care and social assistance sectors as well as the leisure and hotel industry totaled 855,900, according to data from the Bureau of Labor Statistics, which means that the economy is in fact in the hole of more than 250,000 jobs without these groups.

Zandi also pointed out that less than half of the industries followed by BLS have added to pay in the past six months, adding that “this only happens when the economy is in recession”.

The distribution index in the Jobs report assesses the growth concentration. Reading less than 50 means that more industries reduce the jobs added. In August, it was 49.6 and the average of three months was 47.9.

“Job recession”

Zandi has constantly sounded alarms on the economy. Last month, after the shocking job report of July, he warned that “the economy is on the precipice of the recession”, stressing the expenses and narrowing of low consumers in construction and manufacturing.

After the publication of the August job report on Friday, Zandi said Fortune Eva Roytburg that the economy is on the verge of recession and can already be in one.

He described the June revision, which showed a loss of 13,000 jobs, all the more important because slowdowns are generally dated from the first month of paying the payroll.

Meanwhile, long -term unemployment has checked above in the past year, and more than 6 million people outside the active population now say that they want a job, against about 5.7 million about a year ago, according to BLS.

“It really looks like a job recession,” said Zandi Fortune. “Employment is stable downwards. Production and income is still increasing, but the economy is incredibly vulnerable. Nothing else can go wrong, or it could give us a complete slowdown. ”

Admittedly, the economy remains in positive territory for the moment. GDP increased by 3.3% in the second quarter, and the Atlanta Fed GDP shows that the third quarter is in pace for an increase of 3%.

Earlier Sunday, the secretary of the Treasury, Scott Bessent, was invited to respond to the commentary on the recession of Zandi’s jobs.

In an interview on NBC Meet the press with Kristen WelkerHe said that policies are in place that will create good well-paid jobs. Bessent also said that the pay data collected in August had historically been subject to large revisions later, and he blamed the federal reserve not to reduce rates earlier.

“President Trump has been elected for change, and we will pass with economic policies that will settle the economy well. I believe that in the fourth quarter, we will see substantial acceleration,” he predicted.

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