3.4 percent in January: US unemployment hits 50

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Las Vegas (symbolic picture from 2017): New jobs were created in the leisure and hotel sectors, among others

Photo: John Locher/AP

US unemployment has fallen to its lowest level in more than 50 years.

The world's largest economy created 517,000 new jobs in January, almost twice as many as in the previous month, according to the Department of Labor in Washington.

The unemployment rate fell by 0.1 point to 3.4 percent.

The rate was last this low in May 1969.

New jobs were created in the leisure and hotel sectors as well as in the health sector, among other things, as the Ministry of Labor explained.

However, the good labor market figures are likely to cause concern for the US Federal Reserve.

She hopes that the labor market will cool down because of the high inflation.

The US labor market is of great importance for the monetary policy of the US Federal Reserve.

The strong development in January increases the scope for further interest rate hikes in the fight against high inflation.

The Fed last raised its key interest rate on Wednesday, but only by 0.25 percentage points and signaled that interest rates would continue to rise.

In the spring of 2020, millions of people in the United States lost their jobs because of the corona pandemic.

In April 2020, the unemployment rate soared to 14.7 percent - the highest level since the Great Depression of the 1930s.

The US economy was later able to recover from the effects of the pandemic, and unemployment figures gradually fell.

At the same time, however, inflation rose sharply.

It reached a 40-year high of 9.1 percent last June, also due to the effects of Russia's war of aggression against Ukraine.

Inflation has since fallen to 6.5 percent.

It is still well above the Fed's target of two percent.

The central bank has raised the key interest rate eight times since last year, but recently slowed down the rate of increases.

US Treasury bond prices fell sharply after this unexpected data.

ani/dpa/AFP