But she expects “the labor market to relax and economic activity to slow over time in response to restrictive monetary policy” from the central bank, the Fed, she said. precise.
Because the slowdown in the job market goes hand in hand with that of inflation.
The United States has been experiencing a significant labor shortage for more than two years, which has caused wages to soar, contributing to rising prices.
The Fed's key rate © AFP – Samuel BARBOSA
To combat it, the Fed is pushing on rates in order to slow down consumption.
However, she left them unchanged on Wednesday, as during her previous meeting in September.
“The labor market remains tight, but supply and demand conditions continue to balance,” noted Fed Chairman Jerome Powell on Wednesday during a press conference.
Fed President Jerome Powell on November 1, 2023 in Washington © AFP – SAUL LOEB
“Reducing inflation will likely require (…) some easing labor market conditions,” he warned.
The figures published Friday point in this direction, underlines Lydia Boussour, economist for EY, “with a marked slowdown in hiring, a slowdown in wage growth, a slight increase in the unemployment rate and a shorter work week”.< /p>
– Persistent shortages –
Employers, however, still encounter difficulties in recruiting.
“If every unemployed person in the country found a job, we would still have about 3 million jobs available,” noted Stephanie Ferguson, employment manager at the U.S. Chamber of Commerce, in a study published mid -October.
Unemployment in the United States © AFP – Samuel BARBOSA
These difficulties still worry businesses, both because of “the increase in labor costs” and shortages, showed the survey on activity in services published Friday by the professional federation ISM.
“Labor shortages are more persistent” than in 2019, Nela Richardson, chief economist of the business services firm ADP, also commented on Wednesday: when a sector recruits less, “it is difficult to know” if it is “because companies are hiring less or because they cannot find workers.”
The labor market has, however, seen, since the summer, an influx of new workers, “both due to (increase in) participation in the labor market and immigration”, welcomed Jerome Powell on Wednesday, which “partially explains why GDP (gross domestic product, editor's note) is so high.”
The growth of the gross domestic product (GDP) of the United States actually doubled in the third quarter, to 4.9% at an annualized rate.
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