Labor and Housing Markets Struggle, Confirming Recession Fears

August 31, 2022

Hiring at US companies slowed “markedly” in August, missing expectations by more than 50 percent. The pullback is another sign that the country could be entering an extended recession — one that officially began earlier this summer.

Fox Business: Private payroll job growth slowed markedly in August, suggesting that companies are pulling back on hiring amid growing fears of an economic slowdown, according to the ADP National Employment Report released Wednesday morning. 

Companies added just 132,000 jobs last month, sharply missing the 288,000 gain that economists surveyed by Refinitiv had predicted. That is also below the 270,000 gain recorded in July and is the lowest since May, when employers hired just 128,000 workers.

Economists warn that the housing market is also cooling and could enter a severe downturn. Builder confidence has tumbled, mortgage rates have nearly doubled and new home sales in July were down almost a third, year-over-year. One economist said the next few years in the housing market “won’t be pretty.”

Politico: “I think we’re in a housing recession right now,” said Robert Dietz, chief economist at the National Association of Home Builders. “After a year and a half of post-Covid housing strength, this isn’t just a retrenchment to a more normalized trend — this is definitely a weakening.”

That’s a big deal because spending on housing accounts for as much as 18 percent of GDP, and the sector typically leads recoveries. So, even as the Biden administration touts the strength of the labor market and consumer spending holds up, a prolonged downturn in the housing market could deepen any potential recession on the horizon for the U.S. economy.

Bottom Line: New data confirms what Americans have been saying: People are struggling to stay afloat in the Democrats’ broken economy.