From NBCUniversal: 2024-09-06 14:00:07

The U.S. job market is cooling, causing concern among economists regarding key labor-market metrics like unemployment, job growth, and hiring. A recession could be looming if the decline continues, with experts cautioning of a potential crash if the economy doesn’t level off soon.

August saw 142,000 jobs added, below expectations, and a rise in the unemployment rate to 4.2%. Various data indicate “slowing momentum” in the labor market, with declining job growth and a rising unemployment rate. Economists warn that the current figures may not be sustainable over the long term.

Despite concerns about the job market, there is optimism around the stability of permanent layoffs and the rate of layoffs. Layoff data hasn’t significantly changed, suggesting employers are retaining workers. The gradual rise in unemployment is largely due to an increase in labor supply, not layoffs, which is a positive sign.

Federal Reserve officials are expected to cut interest rates soon, providing relief to the economy. Lower borrowing costs could stimulate consumer spending and business investments, ultimately boosting hiring and economic activity. While the relief may take time to take effect, the overall economic outlook suggests a soft landing rather than a recession.

Read more: U.S. job market slows but it’s not yet a ‘three-alarm fire’: economist