U.S. job growth unexpectedly rises in DecemberGovernment data released on Friday showed the labor market remains strong this year even as voters remain pessimistic about the economy ahead of November’s presidential election.
The world’s largest economy added 216,000 new jobs in the last month of 2023 Although a slowdown is expected compared to November, Unemployment rate remains unchanged at 3.7%the Labor Department said.
its about Below 4% for 23 consecutive monthsthat is, more than two years, a goal that was last achieved in the 1960s.
The latest data reflects a return to normalcy in the economy and labor market. Everything was normal before the epidemic. Hiring has remained steady, and although employers are announcing fewer job openings, they are not laying off many workers.
Despite lower unemployment and cooling inflation, Polls show many Americans are dissatisfied with economy.This disconnect may be Issues in the 2024 Electionsconfusing economists and political analysts.
However, a key factor is Public anger over rising prices. Although inflation has been falling more or less consistently for a year and a half, Prices are still 17% higher than before inflation spiked.
Chairman of the Federal Reserve, Jerome Powell, warning of tough times ahead after the central bank began raising interest rates in spring 2022 to combat high inflation. Most economists predict the resulting sharp rise in borrowing costs will lead to a recession in 2023, leading to layoffs and rising unemployment.
However, a recession never came, and it doesn’t seem like it will. The country’s labor market, while cooler than the hot years of 2022 and 2023, continues to create enough jobs to keep the unemployment rate near historic lows.
Labor market elasticity and overall economic durability.
far from entering a recession, andU.S. GDP – Total production of goods and services – growth The annual growth rate from July to September was as high as 4.9%. Strong consumer spending and business investment have largely driven the economic expansion.
at the same time, Average hourly earnings exceeded inflation last yeargiving Americans more money to spend.
In fact, for much of 2023, consumeran important engine of U.S. economic growth, They go to stores, shop online, go to restaurants or travel in November.
Starting from March 2022, The Fed has raised its reference interest rate 11 times, reaching the highest level in 22 years, about 5.4%. Higher interest rates make borrowing more expensive for businesses and households, but they are achieving their goal: beating inflation.
Labor market cooling not enough to signal recession is coming. Normally, slowing job growth would be worrisome. But under current circumstances, with inflation still above the Fed’s 2% annual target, a more moderate pace of hiring is seen as just what the economy needs.
Falling demand for labor tends to ease pressure on employers increase salary To retain or attract workers and pass higher labor costs on to customers by raising prices.
Consumer prices rose 3.1% in November Compared with the previous year, it was a sharp decrease from 9.1% in June 2022 and the highest level in 40 years. The Fed is very pleased with progress so far, having not raised interest rates since July and saying it expects three rate cuts this year.
In addition to the heavy blow to the real estate market, Raising interest rates has not done much damage to the overall economy. Many industrial sectors, such as health care and public administration, have proven relatively resilient to rising interest rates.
(Information from the Associated Press and AFP)