Friday morning’s employment report was actually, actually encouraging. It allayed the considerations of many economists, myself included, that the Federal Reserve might need waited too lengthy to chop rates of interest and that we could also be sliding right into a gratuitous recession. And it confirmed that the U.S. financial system continues to be in an excellent place.
Earlier than the most recent report, there have been quite a lot of indications from surveys and different knowledge that U.S. job creation could also be slowing, maybe to a worrying extent. One good report doesn’t utterly negate these indications. However at the least we are able to say that the dreaded slowdown hasn’t but proven up within the jobs report, which is often the gold commonplace.
Simply take a look at the place we’re proper now. In late September, the Fed’s most well-liked measure of annual inflation got here in at 2.2%, inside a whisker of the goal fee of two%. Now we have now unemployment of 4.051% (that 4.1 quantity you’re listening to is rounded up), barely under the speed the Fed considers sustainable in the long term. If this isn’t a gentle touchdown, I don’t know what’s.
Oh, and one potential nasty October shock has been neutralized with the suspension of the dockworkers’ strike.
Paul Krugman is a New York Occasions columnist.
