The United States has seen an astonishingly positive development in terms of employment relative to the beginning of this year, with the unemployment rate sinking to its most minimal level since 1969. According to the US Department of Labor, it dropped down even further from 3.5% in December 2020 and reached a staggering 3.4%. That is much lower than many experts had predicted, approximately 3.6%. This remarkable recovery comes after last year’s pandemic-induced spike resulting in over 14 percent unemployment rates across America.
More than Half a Million Jobs Created to Reduce Unemployment Figures
The United States economy has created significantly more jobs than anticipated. The Department of Labor reported that 517,000 non-agricultural jobs were added – an astonishingly larger figure than the projected 188,000 new positions. Additionally, this month’s average hourly wages rose by 0.3% and 4.4%, respectively, from last month and year within the same period! This implies that not only have more people acquired employment opportunities but they’re also being compensated justifiably as well.
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The Fed Is Under Pressure
The Federal Reserve has been attempting to reduce inflation by raising interest rates and cooling off the heated labor market. However, due to decreasing inflationary pressure, they recently chose a more lenient approach and raised their key interest rate by just 0.25%, bringing it up to 4.50-4.75%. With this series of moderate adjustments in policy, experts are now predicting that further increases may be necessary for the Fed’s monetary strategy moving forward.
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