The United States labor market has rounded out another buoyant year for employment. The unemployment rate closed 2023 at 3.7% and the economy generated 2.7 million jobs throughout the year. With this, in three years – basically coinciding with the presidency of Joe Biden – a total of 14.75 million jobs have been created, a record figure achieved in the heat of the recovery from the pandemic, but also thanks to the strength of demand and to the fiscal stimuli and incentives that have attracted strong industrial investments.
Employment generation has cooled a bit in the last part of the year, but the monetary authorities welcome this soft landing that, if nothing goes wrong, allows inflation to be controlled without entering a recession. In December, 216,000 jobs were created, according to the data released this Friday by the Bureau of Labor Statistics, dependent on the Department of Commerce. The figure exceeds analysts' forecasts, which pointed to 170,000 jobs.
The United States has generated employment for 36 consecutive months and the unemployment rate has remained below 4% for 23 consecutive months, something not seen in decades, although it has increased from the minimum of 3.4% that it hit in January and April. Despite this success, which Biden does not hesitate to boast of every time he has the opportunity, citizens' discomfort about the economic situation derived from the sharp price increases continues. Inflation has fallen, and is now around 3%, but that does not mean that the price level has fallen, but rather that it is rising more slowly than a year ago.
The US economy has shown surprising resilience. For the past year and a half, forecasts of a recession have come and gone one after another. The economy, in fact, strongly accelerated its growth in the third quarter to the highest pace of 2021 thanks to the strength of consumption, apparently immune to the most aggressive increase in interest rates in four decades. The pockets of savings accumulated during the pandemic partly explain this strength. Recession no longer figures in the central scenario of economists, although they do not consider the risk completely averted.
The difficulties in hiring that many companies have encountered in the recovery stage of the pandemic, when there were many vacancies and few unemployed, serve in some way as a vaccine against the increase in unemployment, as companies think twice before hiring. Dispense with employees due to weakening demand.
“The labor market remains tense, but supply and demand conditions continue to become better balanced,” said the president of the Federal Reserve, Jerome Powell, in the last press conference of last year. “The strong job creation has been accompanied by an increase in the supply of labor. The activity rate has increased since last year, especially in the 25-54 age group, and immigration has returned to pre-pandemic levels,” he added.
The White House, for its part, highlights that 2023 saw the highest rate of women of working age since 1948. The previous maximum of 77.3% in April 2000 has been exceeded for almost the entire year. “This group's record participation in the labor force has served to boost American household incomes and keep consumer spending strong,” maintains the White House Council of Economic Advisers. It also highlights that the economy reached the smallest gap on record between the employment rates of black versus white American workers, with an average of 0.7 percentage points.
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