JANUARY 10, 2022 – 2021 ENDS WITH UNEMPLOYMENT BELOW 4 PERCENT
Last month the Fed spoke about accelerating their timetable regarding raising rates, citing persistent inflation and a strengthening job market. Economists are anticipating the first increase will happen in March.
The US ended the year by adding 199,000 in December, below the average monthly job growth of 537,000 seen during 2021. The slower hiring rate is due to the inability of companies’ being able to find workers as the labor market stays tight. 2021 ended with an increase of 6.4 million jobs over levels seen in December 2020, but there are still 3.6 million less jobs than were at pre-pandemic levels. Job openings are at a historic high and 2022 looks like it will continue to be strong for the labor market. The unemployment rate ends the year at 3.9 percent.
The Fed next meets on January 25-26. We expect more clarity on the tapering of bond purchases and the timing of the next interest rate increase then.