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The economy adds 517,000 jobs in January, exceeding the forecast of experts despite the sharp rise in rates


The unemployment rate fell to 3.4% despite fears of an economic recession in the coming months due to the Federal Reserve's fight against inflation.

The US economy added 517,000 jobs in January, as reported by the Labor Department this Friday, many more than the 187,000 forecast by experts and despite the aggressive increase in interest rates by the Federal Reserve against inflation.

The unemployment rate fell to 3.4%, against the forecast 3.6%, representing a new low in half a century.

The Labor Department report adds to the picture of a resilient labor market, with low unemployment, relatively few layoffs and many unfilled job openings, even as economists forecast a recession in the coming months. 

While good for workers, the constant demand for labor by employers has also contributed to accelerating wage growth and raising inflation.

Job growth in January, which far exceeded the increase of 269,000 jobs recorded in December, could raise questions about whether inflationary pressures will continue to ease in the coming months.

The Federal Reserve has raised its official interest rates eight times since March to contain inflation, the worst in 40 years, which is already slowing.

Companies are still looking for more workers and are holding on tight to the ones they have.

Aside from some high-profile layoffs at big tech companies like Microsoft, Google, Amazon and others, most workers enjoy an unusual level of job security, even at a time when many economists predict a recession is looming.

For all of 2022, the economy had created an average of 375,000 jobs a month.

A rhythm vigorous enough to have contributed to the painful inflation that citizens have suffered.

A tight job market tends to push up wages, which, in turn, fuels inflation.

The Federal Reserve, in order to cool the job market and the economy - and consequently inflation - has steadily raised interest rates, most recently on Wednesday.

Year-on-year inflation has steadily declined since peaking at 9.1% in June.

But, at 6.5% in December, inflation remains well above the Federal Reserve's 2% target, which is why its officials have reiterated their intention to continue raising interest rates for at least a few more months.

Source: telemundo

All news articles on 2023-02-03

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