A sign outside a McDonald’s restaurant in Salem, New Hampshire, Monday, February 27, 2023, offers prospective workers the opportunity to be paid daily for their employment. AP Photo/Charles Krupa
US employers posted 10.8 million jobs in January. This shows that the US job market continues to heat up for Fed inflation fighters.
Job openings have fallen from 11.2 million in December but remain high by historical standards, the Labor Department reported Wednesday, while layoffs increased in January.
The US job market is surprisingly resilient in the face of inflation and rising interest rates.
2021 and 2022 were the two best years for job creation according to official records through 1940. Instead, the employer added a staggering 517,000 jobs to him in January, and economists expect him to add another 208,000 jobs last month, according to a survey of forecasters by data firm FactSet. doing. February figures will be released on Friday.
The unemployment rate fell to 3.4% in January, the lowest level since 1969.
But the flip side of healthy economic growth and robust employment is a resurgence of inflation. Consumer prices hit their 40-year high last June, rising 9.1% year-on-year. Inflation has since eased to 6.4% in January, well above the Federal Reserve’s target of 2%.
In response, the Fed has raised its base rate eight times in the past year.
Federal Reserve policymakers are aiming for a soft landing. In other words, it slows the economy down enough to keep inflation under control without hurting the economy too much. One hope was that employers would cut job opportunities, alleviating wage pressures that could respond to inflation, without actually cutting many jobs.
Many economists believe the Fed’s rate hikes will slow the economy and trigger a recession later this year.