Even though the economy battled the effects of rapidly rising prices, job growth in the US remained robust last month.
In December, employers added 223,000 jobs, bringing the unemployment rate down from 3.6% in November to 3.5%.
Hopes that the largest economy in the world will avoid a serious economic slump this year have increased due to the labour market’s resiliency.
Recent reports of significant job layoffs at banks and tech giants, such as Amazon, have attracted attention as businesses grapple with the effects of higher interest rates and the likelihood of weaker consumer spending.
However, the US Labor Department’s monthly report revealed that nearly every area of the economy was creating new employment, with businesses in the hospitality, healthcare, and construction industries all contributing to the growth.
According to Andrew Challenger, senior vice president at Challenger, Gray & Christmas, which has tracked such announcements since the 1990s, even if job losses are increasing—especially in the IT sector—the total figures stayed close to historic lows last year.
While growing prices are putting pressure on household budgets and impacting businesses in industries like housing and banking, worries are being raised about consumer spending, which is the main driver of the US economy.
According to the most recent data, prices in the US increased 7.1% over the previous year, which is much higher than the 2% pace that is regarded as healthy.
According to analysts, the robust labour market makes the future unpredictable because the Federal Reserve may need to keep raising interest rates significantly if it wants to control inflation.
According to the Labor Department, hourly wages on average increased by 4.6% in December from a year ago. Analysts deemed that to be a good omen for the struggle against inflation because it was at a slower pace than in November.
For workers, though, whose salary increases have not kept up with inflation, it was mixed news.
“The rise in consumer prices is not being matched by an increase in worker wages.” Family budgets are put under pressure because of this. “The way that equation plays out in the next few months will be crucial, especially if inflation pressures ease,” said Mark Hamrick, a senior economist for Bankrate.com.