January 5, 2024, 2:18 PM ET
2023 was the best year for the labor market since the 1950s
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Slowly but surely, Americans are becoming more optimistic about the economy.
Treasury Secretary Janet Yellen said in a television interview Friday that Friday's jobs report only settles questions.
The United States added 216,000 jobs in December, well above economists' expectations for a net gain of 160,000, capping off another memorable year of job growth. U.S. employers added 2.7 million jobs last year. Although this is significantly lower than the record-setting combined numbers of 2022 (7.3 million people) and 2021 (4.8 million people), it is still the 25th highest on record since 1939, according to the Bureau of Labor Statistics. shown in the data.
“The labor market continues to operate at full capacity,” said Yellen, a former Federal Reserve chair. “Importantly, inflation has fallen significantly over the past six months. The Fed's most-watched indicator is right on target at 2%, and Americans are starting to feel it, too.”
A big reason is that inflation is finally reaching a point where Americans are no longer sucking out all of their hard-earned paychecks.
Annual wage growth hit 4.1% last month, outpacing inflation since May. This is a welcome change from his previous 25 consecutive months of negative growth.
“We had periods. [in which] “There was a period where the pandemic was an issue and prices rose significantly in a short period of time,” Yellen said, adding, “So I think we need a period of sustained low inflation where wages are growing faster than… ” he said. They encourage inflation so that people can feel good about their future prospects. ”
Economic indicators for 2023 are pretty good, if not completely blowing away expectations.
Joe Brusuelas, principal and chief economist at RSM US, said in a note Friday that the December jobs report showed “total payrolls increased by 2.7 million, with a record 167.451 billion Americans employed.” “This marks the end of an exceptional year for job creation on record.” .
“The unemployment rate averaged 3.6% over the past year and ended the year at 3.7%, making it the best year for labor since the 1950s.”
But many Americans felt downright awful during that period.
In a November CNN poll, 33% of respondents said they supported the way President Joe Biden is handling the economy. The monthly total was the lowest since June-July 2022, when inflation soared to its highest level in more than 40 years.
Other closely watched consumer confidence indicators remain below pre-pandemic levels but have turned more positive in recent weeks.
On Monday, the New York Fed will provide the latest information on how Americans feel about the economy, when it releases the results of its latest consumer expectations survey.
Friday's jobs report was another indicator that the United States appears to have succeeded in the near-impossible feat of lowering inflation without sending the economy into recession.
“What we're seeing now is a soft landing,” Yellen said. “My hope is that it continues.”