The pace of US job growth is likely to have slowed again in December

The pace of US job growth is likely to have slowed again in December

#pace #job #growth #slowed #December Welcome to Alaska Green Light Blog, here is the new story we have for you today:

Click Me To View Restricted Videos

The pace of US employment growth is likely to have slowed further in December as the Federal Reserve’s aggressive rate hikes begin to weigh more heavily on economic activity.

According to a consensus forecast compiled by Bloomberg, the world’s largest economy is expected to have added 200,000 jobs in the last month of 2022, down from the 261,000 increase recorded in November and well below last year’s peak of 714,000 jobs recorded in February .

The jobless rate is expected to have stabilized at 3.7 percent, just above an all-time low, the data set to be released by the Bureau of Labor Statistics at 8:30 a.m. ET will show, according to economists.

The US Federal Reserve is actively trying to cool the job market and curb demand for new hires as it tries to ease the price pressures that have pushed inflation to a decade high. Since March, the Fed has raised interest rates from near zero to just under 4.5 percent in one of the most aggressive campaigns in its history.

While the worst of the inflationary shock appears to be over, price pressures have taken hold in the service sector of the economy. In an interview with the Financial Times this week, Gita Gopinath, the IMF’s first deputy chief executive officer, urged the Fed to “stay the course” on tightening, arguing that US inflation “isn’t over yet.” be. .

Amid a labor shortage that Fed officials warn will not be easily reversed, wage growth is proceeding at a pace far from the Fed’s 2 percent inflation target.

In December, average hourly wages are expected to have risen a further 0.4 percent, slower than the previous period but still at an annual pace of 5 percent. The labor force participation rate, which tracks the proportion of Americans who are either employed or looking for a job, remains stubbornly below its pre-pandemic level at 62.2 percent.

Fed policymakers have acknowledged that rooting out inflation will require job losses and hence a higher unemployment rate. According to the latest individual forecasts released by the Fed, most officials expect the unemployment rate to rise to as high as 4.6 percent this year and next if interest rates exceed 5 percent and stay there for an extended period.

“Keep [above 5 per cent] until we get evidence that inflation is actually coming down is really the message we’re trying to get across,” Esther George, the outgoing Kansas City Fed President, said Thursday.

Minneapolis Fed’s Neel Kashkari struck a similar tone this week, saying he expects the central bank to raise the federal funds rate by another percentage point in the coming months. He will be a voting member of the policy-making Federal Open Market Committee this year.

Should the Fed continue on this aggressive stance, economists warn that further significant job losses could be on the horizon. Those polled in a joint survey by the FT and the Initiative on Global Markets at the University of Chicago’s Booth School of Business last month predict the unemployment rate will hit at least 5.5 percent next year as the economy slows in a recession overturns.

Click Here To Continue Reading From Source

Related Articles

Back to top button