The US labor market completed another successful year for employment. The unemployment rate was 3.7% at the end of 2023 and the economy added 2.7 million jobs during the year. This means that in three years – which essentially coincided with Joe Biden's presidency – a total of 14.75 million jobs were created, a record achieved in the heat of the recovery from the pandemic but also thanks to strong demand and the tax incentives and incentives that have attracted strong industrial investment.
Job creation has cooled somewhat in the last half of the year, but monetary authorities welcome this soft landing, which, if nothing goes wrong, will allow inflation to be controlled without falling into recession. 216,000 jobs were created in December, according to data released Friday by the Bureau of Labor Statistics, which operates under the Commerce Department. The number exceeds analysts' forecasts, which were based on 170,000 jobs.
The United States has added jobs for 36 consecutive months, and the unemployment rate has remained below 4% for 23 consecutive months, something not seen in decades, although it has remained steady since the low of 3.4% recorded in January and April reached, has increased. Despite this success, which Biden boasts about at every opportunity, citizens' unease about the economic situation remains due to the sharp price increases. Inflation has fallen and is now at around 3%, but this does not mean that the price level has fallen, but rather that it is rising more slowly than a year ago.
The US economy has shown surprising resilience. The last year and a half has seen one recession prediction after another. In fact, the economy accelerated its growth sharply in the third quarter, reaching its fastest pace in 2021, thanks to strong consumption that appears immune to the most aggressive rise in interest rates in four decades. Savings accumulated during the pandemic partly explain this strength. A recession is no longer part of the central scenario for economists, even if they do not consider the risk to be completely averted.
The difficulties in hiring that many companies faced in the recovery phase of the pandemic, when there were many vacancies and few unemployed people, are in some ways serving as a vaccine against the rise in unemployment, as companies think twice before Change settings. If you forego employees who are due, this will reduce demand.
“The labor market remains tight, but supply and demand continue to balance each other better,” said Federal Reserve Chairman Jerome Powell in the final press conference of last year. “The strong job creation has been accompanied by an increase in labor supply. The labor force participation rate has increased since last year, particularly in the 25-54 age group, and immigration has returned to pre-pandemic levels,” he added.
The White House, in turn, emphasizes that 2023 will see the highest proportion of working-age women since 1948. The previous high of 77.3% in April 2000 was exceeded for almost the entire year. “This group’s record participation in the labor market has helped boost American household incomes and keep consumer spending high,” the White House Council of Economic Advisers said. It also highlights that the economy experienced the smallest gap ever between the employment rates of black and white American workers, at an average of 0.7 percentage points.
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