U.S. labor market resilient amid slower job growth
WASHINGTON, D.C., UNITED STATES — The U.S. labor market demonstrated continued strength in 2023, adding approximately 2.7 million jobs over the year despite signs of slowing growth in the final months.
Government data projected 170,000 payroll gains in December, concluding robust hiring, while a Bloomberg survey revealed average hourly earnings rose 3.9% year-over-year in December, the smallest annual increase since mid-2021.
“Job gains have been concentrated in just two acyclical sectors — health care and government — with flat to negative growth in most industries,” said Bloomberg Economics.
“As a result, wage growth will moderate in December. Though a Fed pivot may have stunted recessionary dynamics in the labor market, that dynamic isn’t clear enough yet, and our base case remains a persistent increase in the jobless rate in 2024.”
The U.S. Federal Reserve also projects gradual disinflation over 2024, targeting a 2.4% core personal consumption expenditures (PCE) inflation level amid slowing consumer spending and demand.
Read Chair Powell's full opening statement from the #FOMC press conference (PDF): https://t.co/adyR7clV0C pic.twitter.com/DcIYn1DOSx
— Federal Reserve (@federalreserve) December 13, 2023
Additionally, the Fed indicates a potential 75 basis points cut in 2024 if labor and inflation trends persist.
Globally, the euro zone will closely monitor PMIs and inflation figures this week before the European Central Bank’s upcoming policy decision, while Asian economies report latest trade and price data.
