For nearly a year, the US Federal Reserve has been on a mission to ease the job market and help contain the worst inflation to hit the country in four decades, but the job market hasn't been cooperating.
For example, what happened in January: The government announced Friday that employers added 517,000 jobs last month and that the unemployment rate fell to 3.4 percent, the lowest since 1969.
The job gain was so big that economists were stumped and wondering why the Fed's aggressive rate hike hasn't slowed hiring at a time when many fear a recession is looming.
Instead, Friday's report added to the picture of a resilient US job market, with low unemployment, relatively few layoffs and plenty of job openings. While good for workers, the steady demand for work from employers also helped accelerate a rise in wages, which helped fuel inflation.
Still, Fed inflation watchers could take comfort in the January wage data: Average hourly wages rose 4.4% last month compared with a year earlier, down from the 4.8% increase from the previous year. previous year in December. And from December to January, wages increased 0.3%, below the 0.4% increase in the previous month.
In addition to the sharp increase in jobs it reported for January, the government also updated its figures on earnings for November and December to 71,000 combined on Friday.
The January hiring increase, which far exceeded December's 260,000, spanned several branches and industries. A category that includes restaurants and bars added 99,000 workers. Professional and business services, including accountants and advisers, added 82,000.
Governments added 74,000 jobs, spurred by the end of a labor strike against California's state university system. Health care added 58,000 jobs, retail 30,000, construction 25,000 and the manufacturing sector 19,000.
Interest rates
On Tuesday, Federal Reserve Chairman Jerome Powell said last week's labor market report shows it will take time to bring inflation under control, but he predicted there will be a "significant decline" in rising prices this year.
At the same time, Powell noted that a strong labor market and enduring inflationary pressures mean the US central bank will have to keep raising interest rates this year, though he did not specify how many times. At a press conference last week, Powell suggested there will be "a couple" of additional rate hikes in 2023.
