In January, the unemployment price fell to its lowest in over 53 years : NPR

SCOTT SIMON, HOST:

Employers added greater than half 1,000,000 jobs to the U.S. market final month. January’s job features had been the strongest in six months, and the unemployment price fell to a degree that is not been seen since 1969, when The fifth Dimension topped the charts with this music.

(SOUNDBITE OF SONG, “AQUARIUS/LET THE SUNSHINE IN”)

THE 5TH DIMENSION: (Singing) Let the sunshine, let the sunshine in…

SIMON: The sunny job report comes at an in any other case bushy time for the economic system. Shopper spending’s been falling in latest months, whereas rates of interest are on the rise. NPR’s chief economics correspondent Scott Horsley joins us.

Scott, thanks a lot for being with us.

SCOTT HORSLEY, BYLINE: Good morning, Scott.

SIMON: The Federal Reserve’s been attempting to decelerate the economic system, elevating rates of interest to convey down inflation. The job market, although – what? – hasn’t been paying consideration.

HORSLEY: That is proper. The job market is the Energizer Bunny on this economic system. It simply retains going and going month after month. It regarded as if it had been slowing down a little bit bit in October and November and December. However then alongside comes January. It obtained a second wind and blew previous expectations with 517,000 jobs, nearly twice as many because the month earlier than.

SIMON: And what is likely to be behind that?

HORSLEY: There are some seasonal components which will have inflated that quantity a little bit bit. However we additionally obtained an annual replace from the Labor Division yesterday based mostly on extra full data that reveals job development during the last two years was considerably stronger than initially reported. So even in the event you low cost that massive January quantity, the job market nonetheless has loads of momentum. On the White Home yesterday, President Biden famous that within the 24 months since he took workplace, the economic system’s added greater than 12 million jobs.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT JOE BIDEN: That is the strongest two years of job development in historical past by a protracted shot. As my dad used to say, a job’s about much more than the paycheck. It is about your dignity.

HORSLEY: All these further paychecks might give a carry to the economic system. However there may be additionally a priority, Scott, that employees’ rising wages might make it more durable to convey down inflation.

SIMON: And inform us about rising wages.

HORSLEY: Wages in January had been up about 4.5% from a 12 months in the past. Now, that is truly the smallest annual enhance for the reason that summer time of 2021. So wage development is cooling off a bit. However wages are nonetheless climbing sooner than the Federal Reserve is comfy with. After all, employees prefer it when their wages go up. However the Fed is worried that rising wages might gasoline increased costs, and that might drive the central financial institution to push rates of interest even increased because it tries to curb inflation.

SIMON: Scott, how are the monetary markets reacting?

HORSLEY: You realize, it is fascinating. Final 12 months, a very robust jobs report like this in all probability would have prompted the inventory market to tank as a result of traders would have fearful about inflationary results and the way the Fed may reply with rising rates of interest. However yesterday, markets just about shrugged off this report. Shares had been down a little bit bit for the day. However each the S&P 500 index and the Nasdaq ended up for the week. Economist Sarah Home of Wells Fargo says perhaps traders are simply pondering a little bit bit in another way proper now.

SARAH HOUSE: Perhaps markets are seeing excellent news as excellent news once more for a change. And on the finish of the day, I feel the truth that we’re nonetheless including so many roles, and that is good for shopper demand – perhaps it has been seen as, you realize, good for simply the economic system’s general development prospects.

HORSLEY: Fed Chairman Jerome Powell did warn this week that the battle over inflation shouldn’t be but gained. He says there’s nonetheless work to do to get costs below management. However here is some extra excellent news. For the previous couple of months, wages have been going up sooner than costs, which suggests these paychecks the president talked about are stretching farther. And that is the other of what was occurring for a lot of the final 12 months.

SIMON: NPR’s Scott Horsley.

Thanks a lot.

HORSLEY: You are welcome.

(SOUNDBITE OF MEXICAN INSTITUTE OF SOUND’S “MY BUDDY @JULPS”)

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