The government reported that the economy added 223,000 jobs in December, which is more than double the amount that economists believe the Federal Reserve wants to see to be confident that inflation is cooling.
A total of 4.5 million jobs were added in 2022. The reaction of the markets to this news is uncertain, as equity futures were higher after the release of the consumer price index (CPI).
Experts believe that the inflation data confirms that inflation is finally being controlled, which means there is a higher chance that the Federal Reserve will pursue less aggressive interest rate hikes.
The markets opened positively on Thursday but have had difficulty gaining strength. Experts anticipate that the labor market and inflation data will have moderated to the point where the central bank will be compelled to suspend rate increases before their May meeting, but given that the Fed has already indicated that the terminal federal funds rate may surpass 5% and that a rate cut is only likely to occur in 2024, this may remain wishful thinking.
The Bureau of Labor Statistics will be changing the way the US CPI is calculated going forward by updating spending weights on an annual basis using data from a single calendar year.
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