What's going on?

Data out on Friday showed that the US economy added far more jobs than expected last month.

What does this mean?

The US government euphemistically dismissed the arrival of a technical recession last week as a �transition to a lower footing�, which is the equivalent of saying that going bald is a �transition to a lower hair count�. Call it what you want, but the slowdown was still expected to impact the country�s workforce in July. So imagine everyone�s surprise when it didn�t: the US added 528,000 jobs � more than twice the 258,000 expected, and well ahead of the already impressive 388,000 average gain of the past four months (tweet this). Consider too that the number of people either in or looking for work dropped yet again, meaning the unemployment rate fell to 3.5% � tied for the lowest it�s been since 1969.

Why should I care?

For markets: Nothing can stop the Federal Reserve.
The Federal Reserve mainly focuses on two aspects of the economy in its decision-making: the jobs market and inflation. So the fact that the former is so strong gives the central bank more leeway to keep being tough on the latter. More incentive too: last month�s higher-than-expected wage growth will give people more disposable income, while increased competition for a smaller pool of workers will only drive wages higher still. That might be why even more traders are now betting on a third-straight 0.75% hike in September.

Zooming out: Don�t be fooled.
You don�t need to go far to find less favorable signs for the global economy: data out last week showed that global chip sales growth � a good indicator of demand since they�re used in everything from cars to computers � has now fallen for six straight months. That�s the longest drop-off since the US-China trade war in 2018, and it�s yet another foreboding sign that a global recession is right around the corner.