Good News for Workers, Bad News for the Fed as Job and Wage Growth Sizzles – By Michael Rainey (The Fiscal Times) / Dec 3, 2022
In a sign that the U.S. labor market remains exceptionally tight, employers added a higher-than-expected 263,000 jobs in November, while average hourly wages grew by 5.1% on an annual basis, the Bureau of Labor Statistics announced Friday. The unemployment rate held steady at 3.7%.
The data comes a day after new inflation data suggested that price increases in the economy are easing, but Friday’s report shows that the labor market is still remarkably strong – and the Federal Reserve still has its work cut out for it as the central bank tries to slow the economy through tighter monetary conditions.
The report sent stocks tumbling as traders contemplated the threat of higher interest rates from the Fed, though they recovered later in the day. Most investors still think that the Fed will raise its key rate by 50 basis points in December, less than it has at its previous four meetings, but the strong labor market data likely increases the odds that the Fed will raise rates higher and keep them high longer in its war against inflation.
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