US hiring surge with January gain of 517k jobs
Other recent measures also gave reason to believe that the economy was starting to slow down. Consumer spending fell late last year, a sign Americans were finally becoming more cautious amid rising prices, dwindling savings and recession fears. And the housing market appeared to be slowing as high mortgage rates made buying too expensive for many prospective homeowners, though there has been some easing lately.
Frequently asked questions about inflation
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What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar won’t go as far tomorrow as it did today. It is usually expressed as the annual change in the price of essential goods and services such as food, furniture, clothing, transportation and toys.
What Causes Inflation? This may be the result of increasing consumer demand. However, inflation can also rise and fall on developments that have little to do with economic conditions, such as E.g. limited oil production and problems in the supply chain.
Is inflation bad? It depends on the circumstances. Rapid price increases mean problems, but moderate price increases can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation usually spells trouble for stocks. Financial assets in general have historically performed poorly during inflationary booms, while tangible assets like houses have held up better.
January’s hiring numbers suggest officials may still have more work to do to slow labor market momentum and rebalance the economy.
The report showed that the job gains were broad-based, even touching some sectors that were expected to slow as the Fed’s rate hikes seeped through to the labor market. At the top were leisure and hospitality businesses, including restaurants, bars and hotels, which added 128,000 new jobs, and healthcare, which added 58,000 new jobs – both sectors that have been upended during the pandemic. Professional and business services also increased their recruitment.
There was also a significant increase in government employment, although this was partly due to striking workers returning to work at the University of California.
The information sector lost 5,000 jobs. But even that was a relative blip given recent headline-grabbing layoffs at tech giants like Microsoft and Google’s parent company Alphabet.
“I would definitely say there was a slowdown in some industries in late 2022,” said Nicola Hancock, general manager for the Americas at AMS, a talent acquisition and consulting firm. But she added, “All of our clients are still hiring.” AMS works with blue-chip companies in industries like banking, financial services, technology and pharmaceuticals.
To make matters worse, some emerging trends in the labor market that pointed to an imminent economic slowdown appeared to be winding down. Hours worked increased, including in manufacturing and construction. And temporary agency jobs, which are trending down due to economic uncertainty, rose by 26,000 after months of declines.