Note: The following is based upon content from Variety Intelligence Platform’s special report “The Media Business in a Bear Market,” available exclusively to subscribers.

Yet another economic data point is creating more confusion.  

The U.S. economy added a jaw dropping 528,000 jobs in July, according to the latest monthly data from the U.S. Bureau of Labor Statistics. July’s figure far exceeded consensus estimates for 250,000 additions during the month, and unemployment ticked lower to 3.5% and was its lowest level since February 2020. Another sign of continued strength in the labor market. 

Though backwards looking in nature, July’s jobs report is the latest data point to offer a glimpse into the health of the broader economy, and it underscored the dichotomy between strength in the labor market and weakness in most other parts of the economy. Even as the labor market is signaling an all clear (for now), the rest of the economy is sending a much different message. 

On Jul. 28, the U.S. Bureau of Economic Analysis released its first reading for Gross Domestic Product (GDP), which showed that the U.S. economy contracted for the second consecutive quarter. Back in the day, that would’ve almost definitively characterized a recession; however, conditions and definitions of a recession have since changed.  

The National Bureau of Economic Research (NBER) is the official arbiter for recessions, and the group has yet to officially declare a recession in the U.S. The recession debate has now become a battle of semantics, and the mere anticipation of one has already shaken business and consumer sentiment. Persistent supply chain disruptions, soaring inflation and rising interest rates are just some of the major factors stifling growth across every sector, including media and tech. 

While it’s impossible to measure HOW this economic downturn will truly impact every individual company, the fact is the challenges that lie ahead are very real for the time being. The media business is consumer-facing, so shifts in consumption habits are being very closely monitored.

So far, the actual consumer spending data has not materially worsened; however, the consumer sentiment data revealed a gloomy economic outlook among U.S. consumers. A prolonged period of declining consumer sentiment would really signal real trouble.  

So goes consumer spending, so goes the economy. There is still so much uncertainty about the economy and the future of the economy, but to learn how the different facets of the media business could be impacted in the months ahead, check out VIP+’s in-depth analysis in “The Media Business in a Bear Market” report.