Employers Added 223,000 Jobs in Last Month – American Jobs Report
The U.S. economy created jobs at a slower, but still comfortable rate in 2022’s end. Higher interest rates and changing consumer behavior impacted the labor market without bringing it down to a halt.
The December employment figures from the Labor Department showed that 223,000 employers added jobs on a seasonally adjusted basis. This was in line with economists’ expectations, although it is the lowest gain since President Biden assumed office.
This gradual cooling suggests that the economy is returning to balance after years of disruptions caused by pandemics. So far, there has been little pain for workers. The unemployment rate fell to 3.5 percent in early 2020, matching the 1969 low.
Chris Varvares (co-head of U.S. Economics for S&P Global Market Intelligence) stated that “if the U.S. is slipping into recession”, nobody has told the labor market. He also noted that the December number is near twice the 100,000 jobs required to keep pace with population growth.
Stocks rose on the news. The S&P 500 gained 2.3 percent, in line with expectations that a slower pace of job growth and wage increases could lower prices and make it less aggressive for the Federal Reserve to raise interest rates.
As the economy continues to recover from the 2020 plunge, the report showed that 4.5 million jobs were created in the year. Despite this, the economy is still far from where it was before the pandemic. There are also predicted job losses in the coming year.
Biden’s administration praised the report and called it proof that its economic agenda is working. Martin J. Walsh, Labor Secretary, stated that the past two months have seen job growth, wage rates rise, and inflation pressures fall. It’s a steady and slow approach to bringing down inflation, and it doesn’t worry about going into recession.
It is not possible to avoid a recession. The Fed must be able to adjust interest rates so that inflation is contained but not too high that the economy spirals downward. This is a delicate balance that the Fed isn’t certain is possible.
The Fed’s strategy of limiting the labor market may be finally working. This strategy remained outstanding even as other drivers of economic activity began to slow down. As people are reshaping their lives and seeking better wages, wage growth has slowed to 4.6 percent from a year ago.
Layoffs and initial claims to unemployment insurance remain low. However, the gap between available workers and the listed jobs is much larger than the historical average.
The Fed predicts that the very low unemployment rate will increase to approximately 4.6 percent by year’s end, as the Fed increases its interest rates, forcing companies to retrench. Employers would need to lose well over a million jobs by 2023 for the Fed’s prediction of success to become a reality.
News Source: The New York Times
Post Title: Employers Added 223,000 Jobs in Last Month – American Jobs Report
Posted Date: January 16, 2023
Author: USA Jobs