Although the labor market in the United States slowed its recovery, hiring showed a solid recovery, despite the interest rate levels applied by the Federal Reserve to contain inflation. In September, 263,000 jobs were created and the unemployment rate fell to 3.5%, against 3.7% in the previous measurement.
Despite the recovery of the labor market, wages during this year they faced their main drop in purchasing power in 25 years.
The estimates placed job creation for the month around 250,000a figure that exceeded the final data, although remained below the previous month’s measurement of around 315,000. So far this year, the average monthly job creation was 420,000, compared to 562,000 per month during 2021. The most dynamic sectors in job creation were leisure and hospitality and health care.
These labor market data are known two weeks after the Federal Reserve implemented a rate hike of 75 basis points, the same percentage as in the two previous increases. The performance of the labor market shows a recovery resistant to monetary policy.
The expectation now focuses on continuing with increases in these levels to insist on controlling inflation which has reached record levels. But the approach risks putting the United States into an economic recession and putting millions of people out of work, economists warn.
Yet so far this year, the US labor market has defied expectations of a slowdown. “This is a turning point,” he said. Erica Groshen, economist at Cornell University, to ABC News. “I expect we will see some signs of loosening in the labor market.”
Job openings plummeted by more than 1 million in August, marking a 10% drop from 11.1 million registered vacancies in July, according to a government report published on Tuesday. In the meantime, unemployment insurance claims increased by 29,000 to 219,000 in the week ending October 1.
After announcing the rate hike last month, Federal Reserve Chairman Jerome Powell reaffirmed the central bank’s commitment to reduce inflation to a target rate of 2%. The Federal Reserve forecast that its rate hikes would push the unemployment rate to 4.4% by the end of 2023.
The country’s monetary policy also brings other consequences: mortgage interest rates of the United States rose to a 16-year high of 6.75%, posting the seventh consecutive weekly increase, leading to a drop in home loan applications.
Source: Ambito
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