The United States economy created 372,000 jobs in June beyond the initial forecast. Economist experts predicted that employment growth should be between 250,000 and 295,000 roles. June large employment helped the economy to regain all lost jobs during the COVID 19 global pandemic.
The United States has managed to maintain a stable economy in the last few months. According to the US Bureau of Labor Statistics, the unemployment rate has remained low at 3.6% for the fourth month in a row. This symbolizes the strength of the labor market that arms the Federal Reserve with ammunition to increase the United States interest rate.
Increase in Interest Rate
The Federal Reserve announced that the increase in interest rate will be a three-quarter percentage ranging between 1.5% and 1.75%. This is due to the recent inflation in the US. However, there might be a continuation in the increase due to the present state of the economy.
The United States has been experiencing a high cost of living like other neighboring cities. This is due to the rise in the price of food and energy since 1981. Also, the present lockdown in China and the conflict between Russia and Ukraine have influenced the hike in the cost of living.
Effect of Russia and Ukraine War on The U.S. Economy
In agreement with this, David Malpass, the world bank President said “the war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hindering growth. Recession will be hard to avoid by many countries.”
The conflict has increased the price of oil and other necessary commodities. The inability to export has made tackling the economic crisis difficult. From the beginning of the year till April, inflation hit a 40-year high of 8.6%. The US Federal Reserve has adopted several methods to ease the rate of price growth.
The managing director at Charles Schwab UK, Richard Flynn, said the US stock market and economy have been struggling with inflation from the first half quarter of the year.