January may have delivered lower, if still solid, job growth
WASHINGTON (AP) — The American economy has an unusual problem: The job market looks too strong — at least to the inflation fighters at the Federal Reserve.
Companies are still seeking more workers and are hanging tightly onto the ones they have. Putting aside some high-profile layoffs at big tech companies like Microsoft, Google, Amazon and others, most workers are enjoying an unusual level of job security even at a time when many economists foresee a recession approaching.
Employers have added at least 200,000 jobs every month for 24 straight months — the longest such streak in government records dating to 1939. Economists think the streak ended last month, if just barely: They have forecast that the government will report Friday that the economy added 185,000 jobs in January, according to the data firm FactSet, and that the unemployment rate ticked up to 3.6% from a half-century low of 3.5%.
That would still represent a solid job gain, though decisively below the red-hot pace of the past year. For all of 2022, the economy added a sizzling average of 375,000 jobs a month. That was a pace vigorous enough to have contributed to the painful inflation Americans have endured, the worst such bout in 40 years. A tight job market tends to put upward pressure on wages, which, in turn, feed into inflation.
Hence, uneasiness at the Fed. The central bank, hoping to cool the job market and the economy — and, as a consequence, inflation — has raised its benchmark interest rate eight times since March, most recently on Wednesday. Since July, monthly hiring has steadily decelerated even while remaining at historically healthy levels.
Year-over-year measures of consumer inflation have steadily eased since peaking at 9.1% in June. But at 6.5% in December, inflation remains far above the Fed's 2% target, which is why the central...
