For months, the Fed has been warily watching the U.S. economy’s robust job gains out of concern that employers, desperate to hire, will keep boosting pay and, in turn, keep inflation elevated. But January’s blowout job growth coincided with an actual slowdown in wage growth.
Federal Reserve
Pay and benefits for America’s workers grew at a healthy but more gradual pace in the final three months of 2022, a third straight slowdown, which could help reassure the Federal Reserve that wage gains won’t fuel higher inflation.
The ongoing slowdown in wholesale price growth is adding to evidence that the worst bout of inflation in four decades is steadily easing, though it remains far above the Federal Reserve’s target of 2%.
A look at the Chicago residential property market as we head into 2023 after a year of interest rate hikes.
As head of a regional Fed bank, Goolsbee will have a vote on the central bank’s interest rate decisions in 2023. Each year, four of the regional bank presidents rotate into voting positions on the Fed’s rate-setting committee.
Friday’s report from the government showed that hiring was brisk across industries last month, though the overall gain declined from 315,000 in September. The unemployment rate rose from a five-decade low of 3.5% to a still-healthy 3.7%.
The Fed’s move raised its key short-term rate to a range of 3.75% to 4%, its highest level in 15 years. It was the central bank’s sixth rate hike this year — a streak that has made mortgages and other consumer and business loans increasingly expensive and heightened the risk of a recession.
Friday’s government report showed that hiring fell from 315,000 in August to the weakest monthly gain since April 2021. The unemployment rate fell from 3.7% to 3.5%, matching a half-century low.
The number of available jobs in the U.S. plummeted in August compared with July as businesses grow less desperate for workers, a trend that could cool chronically high inflation.
The economy shrank in the first half of this year, the government confirmed in a report Thursday, underscoring fears of a broad-based slowdown that could lead to a recession.
The Dow Jones Industrial Average fell 1.1%, becoming the last of the major U.S. stock indexes to fall into what’s known as a bear market. The S&P 500 closed 1% lower and the Nasdaq dropped 0.6%.
The Dow Jones Industrial Average fell 1.6%, closing at its lowest level since late 2020. The S&P 500 fell 1.7%, close to its 2022 low set in mid-June, while the Nasdaq slid 1.8%. The selling capped another rough week on Wall Street, leaving the major indexes with their fifth weekly loss in six weeks.
Unemployment dropped another notch, from 3.6% to 3.5%, matching the more than 50-year low reached just before the pandemic took hold.
The decline that the Commerce Department reported Thursday in the gross domestic product — the broadest gauge of the economy — followed a 1.6% annual drop from January through March. Consecutive quarters of falling GDP constitute one informal, though not definitive, indicator of a recession.
Growth appears to be sputtering, home sales are tumbling and economists warn of a potential recession ahead. But consumers are still spending, businesses keep posting profits and the economy keeps adding hundreds of thousands of jobs each month.
If you were planning to buy a new home, should you do it before rates rise again? What if you need to upgrade your car? And is it good to pay off your credit card completely, or should you carry a small balance to boost your credit score?
