Spike in US job growth raises hopes of soft landing
US job growth surged unexpectedly in December, government data showed on Friday, wrapping up a solid year for the labor market even as voters remain gloomy about the economy ahead of November's presidential election. The Department of Labor said the United States added 216,000 jobs in the final month of 2023. The unemployment rate was unchanged at 3.7 percent, holding at a historically low level and defying forecasts of an uptick. These robust figures come as higher interest rates bite, after the Federal Reserve lifted the benchmark lending rate rapidly and held it at a high level to ease demand and rein in inflation. They also add to optimism that the United States is achieving a so-called soft landing where inflation comes down without a significant downturn. "This morning's report confirms that 2023 was a great year for American workers," said President Joe Biden. While strong job creation continued as inflation fell, Biden conceded: "I know that some prices are still too high for too many Americans, and I am doing everything in my power to lower everyday costs." Although the economy has defied recession predictions in the face of elevated rates, many Americans remain pessimistic as they grapple with higher costs -- as Biden struggles to shift perceptions as he seeks reelection. "Factoring in downward revisions to the prior months' figures, the three-month average employment gain was 165,000, right in line with the 2019 average," said ZipRecruiter chief economist Julia Pollak. This suggests the labour market has returned to "pre-pandemic normal," she added. Wage growth was steady in December, rising 0.4 percent from November 2023, said the Labor Department. From the year before, average hourly earnings rose 4.1 percent, slightly above November's reading. "This remains above the Fed's comfort zone of around 3.5 percent and will keep Fed policymakers on alert," said EY chief economist Gregory Daco. "Still, we anticipate that wage pressures will cool further," he added. In 2023, although sectors like manufacturing and housing were hit harder by higher rates, a resilient labor market helped support consumption and the broader economy. Last month, employment continued to trend up in areas like government and health care. But transportation and warehousing lost jobs. (AFP)