Although the U.S. has experienced two declining quarters of GDP, defined as a technical recession, many are left wondering whether the economy is really in a recession as unemployment rates remain at historical lows of 3.5%.
Unemployment Rates By State: According to the U.S. Bureau of Labor Statistics, unemployment rates for July 2022 were unchanged in 33 states, lower in 14 states including the District of Columbia and increased in three states, since June. The District of Columbia and all 50 states saw unemployment decrease from a year earlier by 1.9%.
The states with the lowest unemployment rates include Minnesota at 1.8% and Nebraska, New Hampshire and Utah with unemployment rates at 2%. The District of Columbia had the highest unemployment rate at 5.2% and New Mexico and Alaska were both at 4.5%.
New Mexico had the largest over-the-month unemployment rate decrease of 0.4%, while the largest unemployment rate decrease from July 2021 occurred in California at 3.5% and Rhode Island at 3.3%, showing signs of a tightening labor market in 2022.
Overall, there were 17 states that had unemployment rates lower than the U.S. national average of 3.5%, while 10 states and the District of Columbia had higher rates and 23 states had rates that were not different from the national unemployment rate.
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Nonfarm Payroll Employment: For July 2022, nonfarm payroll employment increased in 20 states, decreased in two states and was essentially unchanged in 28 states and the District of Columbia. The largest job increases happened in California (84,800), Florida (73,800) and Texas (72,800), with the highest percentage increase for the year from Texas of 5.8%.
Recession Fears: With high inflation, low consumer confidence and a string of 13F filings that revealed notable hedge fund managers liquidating into cash, such as the “Big Short” investor Michael Burry, it was no wonder why many remain hawkish about where the U.S. economy is heading.
CNBC reported that 17.6% of builder contracts fell through in July 2022, compared to 7.5% in July 2021 and 8% in April 2022, which showed signs of an effective interest rate policy.
Furthermore, the average duration of a recession in the U.S. since the 1940s was 11.1 months, considering the first two quarters of the year were already depressed, Forbes reported. Some could argue that the brunt of the recession is already over as the U.S. labor market continues to strengthen, while others would argue that it is just the beginning.
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