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US Labor Market Continues to Remain Strong as G-7 Countries Agree to Cap Price of Russian Oil

Job growth slowed in August but stayed solid, suggesting that rising interest rates and fear of a possible recession are leading companies to pull back on hiring, but the labor market recovery remains resilient.
US Labor Market Continues to Remain Strong as G-7 Countries Agree to Cap Price of Russian Oil

The U.S. labor market added 315,000 jobs in August, hitting a 20-month streak in strong job growth that’s powering an economy through ominously high inflation, writes the Washington Post. The unemployment rate ticked up slightly to 3.7 percent, according to a monthly jobs report released by the Bureau of Labor Statistics on Friday, with 344,000 more people unemployed than the previous month.

Labor market added 315,000 jobs in August, a bright spot in the economy (Washington Post)

Excerpt from the Washington Post: The August jobs gains were the lowest monthly pickup so far this year, but the labor market remains an area of strength for the economy, especially as the Federal Reserve raises interest rates to rein in blistering inflation. The biggest gains were in professional and business services, which added 68,000 jobs in August, shooting past its pre-pandemic numbers. The economy has more than recovered the 20 million jobs lost during the pandemic. Meanwhile, other indicators, such as a decline in economic output and persistent higher prices for just about everything, suggest a less rosy picture, raising questions about how much longer the hot job market can last.
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According to CNBC, stocks rose on Friday, cutting losses for the week, as August’s jobs report came in about as expected. The data eased fears that a hotter labor market would give the Federal Reserve leeway to get more aggressive with its rate hikes.

Dow jumps 300 points Friday after a solid August jobs report, cutting losses for the week (CNBC)

Excerpt from CNBC: Investors were comforted by the highly anticipated jobs report, which showed the economy added 315,000 jobs for the month, just under the Dow Jones estimate for 318,000. Steve Sosnick, chief strategist at Interactive Brokers, called it a "Goldilocks" report. "Not too hot. Not too cold. It’s right around expectations. There’s nothing in here that takes 75 [basis points] off the table," he said. "A number that is within expectations doesn’t change anything. What we’re seeing now is a relief rally." The last major economic report of note is August CPI on Sept. 13 and is more likely to determine how aggressive the Fed needs to be in the near term.
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In other economic news, the top officials of the world’s leading advanced economies agreed on Friday to forge ahead with a plan to form an international buyers’ cartel to cap the price of Russian oil, accelerating an ambitious effort to avoid a price shock while draining President Vladimir V. Putin’s war chest, reports the New York Times.

Oil prices rose on Friday, with West Texas Intermediate crude, the U.S. benchmark, gaining more than 3 percent, to just over $89 per barrel. Still, prices are down for the week, and well off the highs of around $120 a barrel in mid-June.

Price Cap on Russian Oil Wins Backing of G7 Ministers (New York Times)

Excerpt from the New York Times: Finance ministers from the Group of 7 nations said after a virtual meeting that they were finalizing details of a price cap, which they had already agreed to explore at a formal meeting earlier this year. The plan needs to be put in place by early December, ahead of a European Union embargo on Russian oil imports and a ban on the insurance and financing of Russian oil shipments. The Biden administration has been fearful that these moves could send energy prices skyrocketing and potentially tip the global economy into a recession. In recent months, Treasury Secretary Janet L. Yellen and her team have been traveling the globe to solidify support for the price cap idea, an untested proposal that aims to stabilize volatile energy markets that have been roiled since Russia’s invasion of Ukraine earlier this year. 
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