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The Week in Business: Blistering Job Growth

  • August 07, 2022

Analysts had forecast an increase of 250,000 jobs in July. And so it was a shock when the Department of Labor’s report showed that more than twice that number — 528,000 —  were added last month. The blistering pace of growth brought total employment back to prepandemic levels, a befuddling benchmark considering other recent signs of a slowing economy, including a falling gross domestic product and a more sedate housing market. Indeed, this latest jobs report provides more questions than answers about the state of the U.S. economy: What is the cause of employers’ confidence in hiring if many fear a recession? Why is the job market so resilient if the economy seems to be more depressed? These are apparent contradictions that Federal Reserve officials will weigh as they think about what path to take.

Citing the cryptocurrency market crash along with inflation and the worsening economic outlook, the trading app Robinhood announced layoffs of 23 percent of its staff on Tuesday, the second round of job cuts in just a few months. It is still dealing with the fallout from last year’s “meme stock” frenzy, when investors conspired to drive up the stocks of struggling companies like GameStop and AMC, ultimately resulting in lawsuits, a Securities and Exchange Commission report and congressional hearings for Robinhood, which became a key player in the trading. But also disastrous for the company has been its exposure to the crypto market, which analysts said led many companies, like the cryptocurrency exchange Coinbase, to over-hire in the market’s boom time and then cull staff as it plunged. Vlad Tenev, the chief executive of Robinhood, said the company misjudged the economy and trading activity. “As C.E.O., I approved and took responsibility for our ambitious staffing trajectory — this is on me,” he wrote in a blog post.

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