This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Jobs Report Likely Keeps Fed on Track for Rate Rise in March
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Business > Jobs Report Likely Keeps Fed on Track for Rate Rise in March
Business

Jobs Report Likely Keeps Fed on Track for Rate Rise in March

Editorial Board Published January 7, 2022
Share
Jobs Report Likely Keeps Fed on Track for Rate Rise in March
SHARE

Another decline in the unemployment rate in December is likely to keep Federal Reserve officials on track to lift interest rates from near zero at their policy meeting in March.

Contents
Newsletter Sign-upReal Time Economics

Employers added 199,000 jobs in December, the Labor Department said on Friday. Revisions to the previous two months showed an additional 141,000 jobs had been created above earlier estimates. The unemployment rate fell to 3.9%, extending a historically rapid decline over the past six months, from 5.9% in June.

Evidence of tighter labor markets and high inflation has provided new urgency for the Fed to begin draining reservoirs of stimulus it pumped into the economy after the pandemic struck nearly two years ago.


Newsletter Sign-up

Real Time Economics

The latest economic news, analysis and data curated weekdays by WSJ’s Jeffrey Sparshott.


At their meeting last month, Fed officials approved plans to more quickly scale back, or taper, their bond-buying program to end it by March instead of June. They want to stop providing stimulus with those purchases before lifting short-term rates.

Minutes of that meeting, released Wednesday, showed most officials think the economy will reach conditions consistent with maximum employment soon, and some already believed that goal had been reached last month. Friday’s report isn’t likely to change that calculus. Officials have said they would raise rates once that condition is met.

The minutes also twice referred to labor markets as being “very tight,” which suggests greater conviction that the economy will need higher interest rates to slow down growth and prevent overheating.

“We’re making rapid progress toward maximum employment,” said Fed Chairman Jerome Powell at a news conference on Dec. 15.

The share of people ages 25 to 54 who were working in December ticked up to 79% and has climbed a full percentage point since August. That rate reached 80.5% in February 2020 before the coronavirus pandemic struck.

Even though overall job growth was slower than economists had projected in December, strong wage growth is likely to matter more to the Fed. Average hourly earnings rose 0.6% last month, bringing yearly wage growth to 4.7%.

“The modest payroll growth and substantial wage growth is consistent with the narrative that job openings are hard to fill, and that the wage pressure we have seen in recent months is structural and unlikely to reverse any time soon,” said Thomas Simons, an economist at investment bank Jefferies. “This bodes for continued inflation pressure as well.”

The Federal Reserve says it will accelerate the wind-down of its bond-buying program, the biggest step the central bank has taken in reversing its pandemic-era stimulus. Here’s how tapering works, and why it sends markets on edge. Photo illustration: Adele Morgan/WSJ

Fed officials’ decision to take their foot off the gas more quickly reflects a shifting calculus about the potential for stronger demand to push up prices—such as wages and rents—even after supply-chain bottlenecks and shortages of items such as cars abate.

Brisk demand for goods, disrupted supply chains and various shortages have pushed 12-month inflation to its highest readings in decades. Core consumer prices, which exclude volatile food and energy categories, were up 4.7% in November from a year earlier, according to the Fed’s preferred gauge. That is well above both the Fed’s 2% target and officials’ stated desire to have inflation run slightly above that target.

But it has been developments in the labor market, and not just high inflation readings, that have provided fuel for the Fed’s pivot in recent weeks toward tightening policy much faster than appeared likely last summer. Friday’s report will be the last reading officials receive on the labor market before their Jan. 25-26 policy meeting, where officials are likely to continue discussions about how soon and how fast to shrink their asset portfolio once they have raised interest rates.

Fed officials still expect inflation to decelerate this year as supply-chain bottlenecks loosen, but they are more concerned about what the inflation backdrop is even after that happens because of rising wages and housing costs. They are watching for signs that a large jump in prices in 2021 doesn’t lead consumers and businesses to expect higher inflation in the future, which could create the kind of wage-price spiral that has historically led the Fed to ratchet up interest rates quickly, risking a recession.

“There’s a real risk now, I believe, that inflation may be more persistent and…the risk of higher inflation becoming entrenched has increased,” Mr. Powell said last month.

Mr. Powell’s confirmation hearing for another term as Fed chair is scheduled Tuesday before the Senate Banking Committee, giving Mr. Powell a final opportunity to clarify his thinking on the Fed’s policy-tightening preparations before officials’ meeting later this month. Mr. Powell’s current term expires early next month.

Write to Nick Timiraos at nick.timiraos@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:Business NewsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article FedEx Warns of Shipping Delays as Omicron Hurts Staffing FedEx Warns of Shipping Delays as Omicron Hurts Staffing
Next Article Deliveroo, Probing Restaurant-Delivery Snags, Plans to Open Eatery Deliveroo, Probing Restaurant-Delivery Snags, Plans to Open Eatery

Editor's Pick

JPMorgan unveils its 2025 summer season studying record

JPMorgan unveils its 2025 summer season studying record

JPMorgan Chase Chairman and CEO Jamie Dimon on the significance of management abilities, deregulation coverage, power independence and the Federal…

By Editorial Board 4 Min Read
Man shot and killed on one hundredth Avenue in Oakland on Saturday
Man shot and killed on one hundredth Avenue in Oakland on Saturday

Oakland police are investigating the loss of life of a person, 34,…

1 Min Read
Japan to Start Medical Trials for Synthetic Blood This 12 months
Japan to Start Medical Trials for Synthetic Blood This 12 months

credit score – Adrian Sulyok on Unsplash Japan is the primary nation…

4 Min Read

Oponion

Tesla’s Touch-Screen Gaming Probed by U.S. Auto-Safety Regulator

Tesla’s Touch-Screen Gaming Probed by U.S. Auto-Safety Regulator

Vince Patton, a new Tesla owner, shows how he can…

December 22, 2021

Credit Suisse’s New Captain Needs to Show Early Turnaround Progress

Chairman António Horta-Osório had promised to…

January 17, 2022

Thousands protest abortion as 49th annual March for Life returns in-person

Thousands of pro-life activists returned in…

January 21, 2022

Who’s Vem Miller, the person arrested outdoors California Trump rally with weapons?

A Las Vegas man was arrested…

October 15, 2024

Stock Futures Creep Up Ahead of Tech Earnings

U.S. stock futures edged up ahead…

October 25, 2021

You Might Also Like

Omnispace, Gatehouse Satcom and Nordic Semiconductor Exhibit 5G NB-IoT Functionality over Non-Geostationary S-band Satellite tv for pc
Business

Omnispace, Gatehouse Satcom and Nordic Semiconductor Exhibit 5G NB-IoT Functionality over Non-Geostationary S-band Satellite tv for pc

Omnispace, Gatehouse Satcom, and Nordic Semiconductor, at the moment introduced the profitable demonstration of a 5G narrowband Web of Issues…

3 Min Read
74% of asset monitoring initiatives meet or exceed ROI expectations
Business

74% of asset monitoring initiatives meet or exceed ROI expectations

Companies adopting IoT asset monitoring options prioritize wonderful vendor help and seamless integration capabilities over an intensive checklist of options,…

2 Min Read
Iridium and Syniverse Companion to Convey Direct-to-Gadget Satellite tv for pc Connectivity to Cellular Community Operators Worldwide
Business

Iridium and Syniverse Companion to Convey Direct-to-Gadget Satellite tv for pc Connectivity to Cellular Community Operators Worldwide

Iridium Communications Inc., a number one supplier of world voice and knowledge satellite tv for pc communications, right now introduced…

3 Min Read
3 Modern Methods Healthcare Companies Use Tech To Enhance The Affected person Expertise
Business

3 Modern Methods Healthcare Companies Use Tech To Enhance The Affected person Expertise

The healthcare trade is among the largest proponents of know-how use all through the office. It’s an trade stuffed with…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?