U.S. President Joe Biden said recently that the latest employment data for November showed that the U.S. labor market remains strong, and that the U.S. economy may be able to avoid a recession, although the threat of high inflation remains severe.
According to the U.S. Treasury Department, non-agricultural jobs increased by 263,000 in November, which was better than market expectations of 200,000; Government departments and other industries; in addition, the unemployment rate continued to remain at 3.7%, in line with market expectations; the average hourly wage in November recorded an annualized increase of 5.1%, far exceeding the expected 4.6%.
Biden said the data reflected that the U.S. economy is still growing as it enters the peak retail season of the year and has a chance to avoid a recession. At present, most economists predict that the U.S. economy is entering a recession, but the strong employment data supports the consumption of the people, thus driving the growth of the U.S. economy.
Biden also said that he had just signed a law preventing more than 760,000 railroad workers from going on strike across the country, effectively preventing the economy from falling into disaster.
Economists at Bank of America believe that compared with market expectations before the non-agricultural report, the strong non-agricultural report forced the Fed to accept higher terminal interest rates.
Economists still expect the federal funds rate to reach 5 percent to 5.25 percent in the final March next year. A strong labor market could mean the Fed will have to lean toward doing more to keep inflation on a sustainable downward trajectory.
Mark Zandi, chief economist of Moody’s Analytics, believes that the November employment report released by the United States has troubled the Fed when it discusses interest rates. While wage gains are holding up, as long as inflation remains stable and the job market remains healthy, the economy won’t be too bad. As a result, the U.S. economy is moving toward a Goldilocks economy.