💥 The strong June jobs report doesn't end the risk of an impending recession. And that's OK.

Also: 5 Quick Questions for … historian of invention Anton Howes on innovation prizes

In This Issue

The Essay: The strong June jobs report doesn't end the risk of an impending recession. And that's OK.

5QQ: 5 Quick Questions for … historian of invention Anton Howes on innovation prizes

Micro Reads: US chipmaking, the promise of bioscience, AI and the military, and more

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Quote of the Issue

“Machines that replace physical labor have allowed us to focus more on what makes us human: our minds. Intelligent machines will continue that process, taking over the more menial aspects of cognition and elevating our mental lives toward creativity, curiosity, beauty, and joy.” - Garry Kasparov

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The Essay

💥 The strong June jobs report doesn't end the risk of an impending recession. And that's OK.

I would love to tell you that the surprisingly strong June jobs report means concerns about an impending recession have proven unfounded. I really would. But I doubt you’ll find many bearish economists who’ve suddenly turned bullish on the employment news.

Capital Economics

And with good reason. Several reasons, actually: The highest inflation in four decades — the CPI accelerated in May — has slowed household spending. Likewise, consumer sentiment has fallen to either its lowest level since 2013 (the Conference Board’s take) or, you know, the lowest level ever (as measured by the University of Michigan). Other ominous statistics: New US home construction in May declined to the lowest level in more than a year, and a measure of US manufacturing activity weakened in June to a two-year low. Then, of course, there are the Federal Reserve’s ongoing interest rate hikes, which today’s news is unlikely to alter.

Taken together, the broad sweep of current economic activity even suggests to some that we’re already in a recession, such as the Wells Fargo Investment Institute. That’s still an outlier view. Here’s what my AEI colleague and economist Michael Strain told after me the jobs report was released: