US labor market gains momentum, but wage growth loses momentum
US economy added jobs at solid clip in DecemberThe labor market remains tight, pushing the unemployment rate back to its pre-pandemic low of 3.5%, but Federal Reserve officials draw some solace from modest wage growth. can do.
Still, the U.S. central bank’s fight against inflation is far from being won. The employment report closely monitored by the Labor Department on Friday also showed household employment rebounded by a whopping 717,000 last month.
The recent decline in household employment has fueled speculation that nonfarm payrolls, the main measure of employment growth, are exaggerating employment growth.
The resilience of the labor market is supporting the economy by keeping consumer spending up, even as the Fed embarked on its fastest rate hike cycle since the 1980s last March.but it increases the risk The Fed could raise its target rate above last month’s projected peak of 5.1% and hold it there for some time.
“The labor market remains resilient but has lost momentum and labor shortages remain acute.Sal Guatieri, senior economist at BMO Capital Markets in Toronto, said: Don’t expect the Fed to cut back on its hawkish rhetoric or slow its pace of rate hikes on February 1st. ”
