Labor market defies expectations as jobs surge - August 5, 2022

The U.S. Labor Department reported a jobs surge with employers adding 528,000 jobs in July, shrugging off rising interest rates and soaring inflation. Although U.S. jobless claims rose last week in a potential sign of a weakening labor market, overall unemployment fell from 3.6% to 3.5%. While some economists predicted the unemployment rate will increase for some time going forward, the labor market defied expectations in a sign of resiliency. However, the economic backdrop of the jobs report is less rosy with drops in gross domestic product reported for the past two quarters. The number of hungry Americans and the cost to feed them has spiked, according to Feeding America, one of the nation’s largest food bank networks. The president of the organization said food banks have come under inflationary pressure and saw a drop in donations as demand for their services increased. Circumstances for food banks are unlikely to improve in the short term as experts warned that many Americans are having to decide whether to pay for gas, bills or food rather than being able to afford all three. The CFPB announced an investigation into Goldman Sachs’ credit-card business, particularly in relation to bill and refund processing and how the company reports information to credit bureaus. The news follows CEO David Solomon guiding the bank’s pivot towards consumer finance in an effort to diversify revenue sources. The bank said it is cooperating with investigators, although the investigation poses a potential problem for the bank’s six-year-old consumer financial arm which is responsible for the Apple Card. The CFPB has the power to levy millions of dollars in fines and order compensation for affected consumers. The Bank of England predicted the UK will likely fall into a recession this year as the economy is expected to shrink until the end of 2023. The prediction came as the central bank announced its largest interest rate hike since 1995 in a testament to the urgency of the financial situation. Analysts called the bank’s dour