Economists warn of 'significant hikes' with new Jobs Report

Elaina Athans Image
Friday, July 8, 2022
Economists warn of 'significant hikes' with new Jobs Report
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June Jobs Report shows stronger, positive signs in the economy that some economists expected.

RALEIGH, N.C. (WTVD) -- The June Jobs Report shows some positive signs in the economy, and it was stronger than some economists expected.

U.S. employers added 372,000 jobs last month.

On the other hand, painful inflation and higher borrowing rates could discourage consumer and business spending, ultimately leading to scaled back hiring or job cuts.

People on Main Street are certainly hoping things turn around.

"With the gas prices and I've got two trucks, you can imagine, it's rough," said Dust Busters Owner James Smith.

He owns a commercial cleaning business and says he's been in the red.

"I had like 10 contracts and since things been open, nobody's called me back," said Smith. "It's like I'm starting all over."

The Jobs Report found that wages were up, although on an annual basis still lower than the rate of inflation.

The report showed more jobs were added to sectors like healthcare and hospitality.

"What I did note, looking at the internals, that construction hiring is way down - very, very big drop in construction hiring and you could make the case that construction may be one of those early warning indicators of an oncoming recession because obviously they depend upon people making big commitments to buy homes," said NC State Economy Professor Michael Walden.

Walden believes the findings could prompt the Federal Reserve to raise interest rates even higher.

"I think they'll be significant hikes," said Walden. "What the Federal Reserve wants to do is cool things off. They don't want to send us into a recession, but they want to cool things off. They want people to pull back a little bit, not spend as much, give time for the supply chain to be healed and that's their prescription for curtailing the inflation rate."

Another hike would hurt Sierra Leach.

She needs a new car and has been pushing off the purchase.

"My check engine light has come on like three times in the last couple months," she said.

Leach says there's not much for any extra costs in a car note. She works in the nonprofit world and already lives on a tight budget.

"(I have a) three-bedroom house, four roommates - we share a bathroom - what do you do? How do you make it affordable?" said Leach.