Unemployment and inflation move in opposite directions: when one is high, the other is typically low. With inflation at its highest level in 40 years, unemployment is also at its lowest level.

Employers added a bit over 260,000 jobs to their payrolls in August. This shows that the job market is cooling but still active – encouraging news for the Federal Reserve. It is one of the many data points that suggest a recession may not be on the horizon, although this should be taken with a hefty pinch of salt.

Regulators are of course watching these figures very closely. Recent trends have been encouraging, with the number of jobs added to the economy slowly growing every month without going negative. Unemployment has steadily risen as interest rates have tempered consumer spending. Recent forecasts show that it will continue to rise to about 5% by the end of 2023, while inflation will fall to about 3%. These figures aren’t great but are a far cry from a recession.