The unemployment rate in the US dropped to 3.4%, the lowest level in more than 50 years.
On February 6, 2023 by Sahithi ReddyThe unemployment rate in the US dropped to 3.4%, the lowest level in more than 50 years.
More than 500,000 new jobs were created in the U.S. economy in January, indicating that the labour market is still strong and resilient despite rising interest rates and recessionary concerns.
The U.S. added 517,000 new jobs in December, according to the Labor Department, which also increased the previous month’s jobs figure from 223,000 to 260,000.
Additionally increasing in January by three-tenths of a per cent were average hourly wages.
U.S. President Joe Biden welcomed the figures on Friday as a triumph of his plans to stimulate the economy while minimising price increases.
The Biden economic strategy is effective, to put it simply.
The unemployment rate in the United States dropped to 3.4 per cent, the lowest level in more than 50 years.
However, January’s statistic should not be compared to December’s 3.5 per cent unemployment rate because the Bureau of Labor Statistics last month changed the algorithms it uses to smooth out the data for usual seasonal changes.
However, the robustness of the American labour market may allow the Federal Reserve flexibility to keep raising interest rates as it attempts to rein in growing wages in a bid to contain inflation.
Morning Consult’s principal economist is John Leer.
“I have a feeling that everyone was aware of how tight the U.S. labour market was at the moment. Therefore, 517 is obviously considerably stronger than the forecast, which was for, perhaps, 185,000 new jobs to be generated before today’s report. And that naturally gives the Fed some sense that, you know, the number of workers will keep growing and that wage pressure will probably continue to be significant. And I believe that overall, it forces the Fed to be slightly more hawkish and likely to maintain higher interest rates for longer.”
“The economy can return to 2% inflation without a really large downturn or a pretty huge increase in unemployment,” Fed Chair Jerome Powell stated this week.
Leer anticipates weaker future job growth.
“Right now, there is solid job growth, high inflation, and a Fed that is likely to keep interest rates higher for a very long time. And if all of those factors come into play, I believe that later this year, job growth will be relatively moderate.
According to government figures released this week, there were 11.9 opportunities for every unemployed individual at the end of December, with 11 million job openings overall.
