The unemployment rate started the year off strong with an increase in nonfarm payrolls by over 500,000 compared to the estimated 187,000. This lowered the unemployment rate to 3.4% which is the lowest it's been since May of 1969. This led to the labor force participation rate of 62.4%. The largest gain came from the leisure and hospitality sector added 128,000 jobs. This led to a 0.3% increase in average hourly earnings for the month.
This increase comes despite the FED's best efforts to lower inflation and slow the economy down. Chairman Jerome Powell said that the labor markets are still "out of balance" and "extremely tight." As of the end of the year, there were still 11 million open jobs, which comes out to just a little under 2 for available workers.
The FED is still holding out hope to perform a "soft landing" and most economists still expect a small recession at some point this year, despite the positive gains in the labor market.
https://www.cnbc.com/2023/02/03/jobs-report-january-2023-.html
2 comments:
It will be interesting to see what the Fed will do to control the job market. It appears that they are on the correct path in handling inflation through interest rate hikes. I think that it is still reasonable to expect a small recession. We have recently seen some companies implement layoffs such as Google and Microsoft.
I think it's impressive that the unemployment is the lowest it's been in a while despite huge layoffs from companies like Microsoft, Google, and now Disney. Typically low unemployment correlates with high prices and therefore inflation. More people in the workforce means lower wages as well.
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