U. S. employment data confirms no signs of recession
2023.02.03 09:08
U. S. employment data confirms no signs of recession
By Tiffany Smith
Budrigannews.com – In spite of the persistently strong labor market, job growth in the United States accelerated significantly in January. However, a further moderation in wage gains should provide some comfort to the Federal Reserve in its fight against inflation.
Friday’s survey of businesses for the Labor Department’s closely watched employment report revealed that nonfarm payrolls added 517,000 jobs last month. The number of jobs added in December was revised up to 260,000 from the previous 223,000, according to revised data.
Normal hourly profit rose 0.3% subsequent to acquiring 0.4% in December. This brought the annual wage increase down from 4.8 percent in December to 4.4 percent. Reuters polled a group of economists and found that wages would rise 4.3 percent year-over-year and payrolls would rise by 185,000 jobs. The anticipated rise in payrolls ranged from 125,000 to 305,000.
The Labor Department’s Bureau of Labor Statistics (BLS) updated the formulas it uses to smooth the data for regular seasonal fluctuations in the establishment survey and published its annual payrolls “benchmark” revision in January’s report.
About 10% of employment was reclassified into new industries as a result of the BLS’s revision of their industry classification system. Additionally, it included new population estimates in the household survey that are used to calculate the unemployment rate.
As a result, the 3.4% unemployment rate in January is not comparable to the 3.5% rate in December.
The employment report should make it possible for the U.S. central bank, which is focused on wage inflation, to continue increasing interest rates at a moderate pace and lessen the likelihood of a recession this year.
“The economy can return to 2% inflation without a really significant downturn or a really big increase in unemployment,” Fed Chair Jerome Powell told reporters on Wednesday. Economists are becoming more and more in agreement with that sentiment as wage growth is slowing and inflation is decreasing.
After researchers at the Philadelphia Fed published a paper in December claiming that employment growth in the second quarter was overstated by a million jobs, the revisions will garner attention. However, economists have refuted this assertion.
At the end of December, there were 11 million job openings, or 1.9 openings for every unemployed person, according to government data. The Federal Reserve announced “ongoing increases” in borrowing costs on Wednesday as it increased its policy rate by 25 basis points to 4.50 percent-4.75%.
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