The Labor Department said this morning that unemployment fell to 3.4 %. This is the lowest rate they’ve reported in more than 53 years.
That wasn’t a typo. That’s 53 years.
US Employers added 517K new jobs last month. This was the largest job increase in any period since last July when the economy was reopening.
Payrolls grew in a large range of sectors including leisure, hospitality, business, and healthcare. Government payrolls also increased, as workers returned from a strike.
Average hourly earnings grew to 4.4% as compared to a year earlier period. This number was down from 4.8% in December. The ease in labor pricing shows that employers were having less difficulties finding candidates for their open positions.
Let me leave you with this.
The labor markets have been cooling for the past six months. This newest inconsistency may prove to be quite a wrinkle.
Consumer spending, the main factor that drives inflation, has recently decreased. The manufacturing sector is down as well.
Inflation is lower due also to the actions of the Federal Reserve. Their most recent interest rate increase of a quarter point, is the lowest we’ve had since inflation became rampant .
The economy grew at a rate of 1% last quarter, This number was down significantly from prior quarters.
Everything seems to be moving in the right direction except the labor market. The question becomes, what’s next?
If the job market doesn’t cool down, the Fed will have no choice but to continue their interest rate hikes. They’ve already intimated that they’ll do another quarter point increase at the next meeting.
The question becomes whether they’ll do a quarter point hike or increase it to half a point. They may be put into a position where they have no choice. We’ll see. TIme will tell.
Another thing to worry about again is inflation. If jobs are increasing so will spending. This may again raise inflation.
One thing is certain. We aren’t out of this mess by a long shot. Remain vigilant. Be ready. The next few months are going to be interesting.
We’re all going to get through this. Let’s get through it together.
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