The United States labor market has completed another buoyant year for employment. The unemployment rate closed at 3.7% in 2023 and the economy generated 2.7 million jobs throughout the year. With this, a total of 14.75 million jobs have been created in three years – basically coinciding with Joe Biden’s presidency – a record figure achieved in the heat of the recovery from the pandemic, but also thanks to the strength of demand. Fiscal stimulus and incentives that have attracted strong industrial investments.
Job creation has cooled slightly in the latter part of the year, but monetary authorities welcome the soft landing that, if nothing goes wrong, allows inflation to be contained without entering a recession. In December, 216,000 jobs were created, according to data released Friday by the Bureau of Labor Statistics, based on the Commerce Department. The figure beat analysts’ forecasts, which pointed to 170,000 jobs.
The United States has posted 36 straight months of job creation and 23 straight months of below 4% unemployment, not seen in decades, although it is up from the 3.4% lows recorded in January and April. Despite this success, which Biden does not hesitate to brag about every chance he gets, citizens continue to be unsettled about the economic situation brought on by sharp price increases. Inflation has fallen, and is now around 3%, but that does not mean that the price level has fallen, but it is rising more slowly than a year ago.
The US economy has shown surprising resilience. Over the past year and a half, recession predictions have come and gone one after the other. The economy, in fact, accelerated its growth strongly in the third quarter to the fastest pace of 2021, thanks to the strength of consumption, apparently immune to the most aggressive increase in interest rates in four decades. Pockets of savings accumulated during the pandemic partly explain this strength. Economists’ central scenario no longer sees a recession, although they do not believe risk is completely averted.
The difficulty many companies have had in hiring during the recovery phase of the pandemic, when there were many vacancies and few unemployed, serves in a way as a vaccine against rising unemployment, as companies think twice before hiring. For weakening demand.
“The labor market remains tight, but supply and demand conditions remain better balanced,” Federal Reserve Chairman Jerome Powell said at last year’s closing press conference. “Labor supply has increased with strong job creation. Activity rates have increased since last year, particularly in the 25 to 54 age group, and immigration has returned to pre-pandemic levels,” he added.
The White House, for its part, highlights that 2023 saw the highest rate of working-age women since 1948. The previous high of 77.3% in April 2000 was surpassed for almost the entire year. “This group’s record participation in the labor force has boosted incomes for American families and kept consumer spending strong,” says the White House Council of Economic Advisers. It also highlights that the economy has reached the smallest gap on record between the employment rates of black versus white American workers, with an average of 0.7 percentage points.
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