The job market once again proved much more solid than expected in December in the United States, giving ever greater credence to the possibility of a soft landing for the American economy, while the inflation is gradually approaching the Fed’s target.
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For the last month of the year, 216,000 jobs were created, up compared to the 173,000 in November, whose data was however revised downwards, according to figures published Friday by the Labor Department.
The December figure is significantly higher than the 162,000 job creations expected by analysts, according to the briefing.com consensus.
This increase, however, hides signs of relaxation on the labor market, with an increase in part-time jobs and a labor market participation rate which, while still high, is down slightly compared to the month. previous.
These slight variations within the market explain in particular the fact that the unemployment rate remains unchanged, at 3.7%, thus remaining at its lowest level since July.
The American economy thus begins the year 2024, which will be marked by the presidential elections, with an unemployment rate still historically low.
“We see a more balanced job market, where the demand and supply of work are now rather aligned and the upward pressure on wages is not excessive,” the chef stressed to AFP. EY economist, Gregogy Daco.
Figures from the Department of Labor confirm the trend observed the day before concerning job creations in the private sector, estimated at 164,000 in December, according to the monthly ADP/Stanford Lab survey.
ADP chief economist Nela Richardson, quoted in the press release, stressed that “the job market is returning to levels very close to what it was before the pandemic”.
A sign also that the labor shortage which has affected the American labor market for more than two years seems well and truly over, the increase in wages is more moderate and does not “risk fueling the price-price spiral. salaries,” said Ms. Richardson.
The latter nevertheless increased by 0.4% compared to November, the increase being 4.1% over one year, according to data from the Labor Department.
“The unemployment rate remains at a historically low level,” confirmed Rubeela Farooqi, chief economist of HFE, in a note, “the economy continues to create jobs at a robust rate.”
The job market nevertheless continues its soft landing; in 2023, the American economy created an average of 225,000 jobs per month, far from the unprecedented average of 399,000 per month observed in 2022.
Over the whole year, 2.7 million additional jobs were created, compared to 4.8 million in 2022.
“We continue to observe a gradual readjustment of the labor market, with a drop in the number of hires, strategic layoffs, but no clear cut in the labor market,” detailed Mr. Daco.
But the strength of the job market could lead the Federal Reserve (Fed) to wait a little longer before considering loosening its monetary policy.
The American economy has indeed held up well, despite the historically rapid rise in rates since March 2022, now between 5.25% and 5.50%.
Certainly the increase in the PCE inflation index, favored by the Fed, has come very close to the 2% target, to 2.6% over one year in November, but inflation particularly in the sector of services still remains high, which calls for caution from the American central bank.
“For Fed officials, this data supports the idea that it is necessary to maintain a restrictive policy for a while longer. But we anticipate the fact that the next movement will be downward, probably in the middle of the year,” said Ms. Farooqi.