US ends 2023 with 3.7% unemployment rate and 2.7 million new jobs | Economy

The US labor market capped another buoyant year for employment. The 2023 unemployment rate was 3.7%, and the economy added 2.7 million jobs during the year. Meanwhile, over the three years that nearly coincided with Joe Biden’s presidency, a total of 14.75 million jobs were created, a record high achieved in the midst of a post-pandemic recovery, as well as the strength of demand and fiscal stimulus that attracted large industrial investments.

Job creation fell slightly in the last half of the year, but monetary authorities welcome this soft landing, which, if all goes wrong, will keep inflation under control without entering a recession. Data released this Friday by the Bureau of Labor Statistics, which is dependent on the Commerce Department, added 216,000 jobs in December. This figure exceeds analysts’ forecasts, which pointed to 170 thousand jobs.

The United States has added jobs for 36 straight months and the unemployment rate has remained below 4% for 23 straight months, a feat not seen in decades, although it has increased from a low of 3.4% reached in January and April. Despite this success, which Biden does not hesitate to brag about whenever he gets the opportunity, citizens remain uneasy about the economic situation caused by sharply rising prices. Inflation has fallen and is now around 3%, but this 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 remarkable resilience. Over the past year and a half, recession forecasts have come and gone one after another. In fact, the economy accelerated strongly in the third quarter to its fastest pace of 2021, thanks to the strength of consumption apparently immune to the most aggressive interest rate hikes in four decades. Pockets of savings accumulated during the pandemic partly explain this strength. A recession is no longer in economists’ central scenario, although they do not believe the risk has been completely averted.

The hiring difficulties faced by many companies during the post-pandemic recovery phase, when there were many vacancies and few unemployed people, serve as something of a vaccine against rising unemployment as companies think twice before hiring employees. to weakening demand.

“The labor market remains tight, but supply and demand conditions continue to better balance,” Federal Reserve Chairman Jerome Powell said at his final news conference last year. “Strong job creation has been accompanied by an increase in labor supply. Activity levels have increased since last year, particularly in the 25 to 54 age group, and immigration has returned to pre-pandemic levels,” he added.

The White House, for its part, emphasizes that 2023 saw the highest level of working-age women since 1948. The previous high of 77.3% in April 2000 was exceeded for almost the entire year. “This group’s record labor force participation has helped boost American household incomes and keep consumer spending strong,” says the White House Council of Economic Advisers. It also highlights that the economy has achieved the smallest gap in history between the employment rates of black and white American workers – an average of 0.7 percentage points.

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