(Finance) – The exceptional growth in US employment in January 2024 and upward revisions to job growth in recent months mean the U.S. labor market now appears “even more resilient than previously thought“. Economists observe this UniCreditrecalling that the economy added a whopping 353,000 jobs in January, the highest number in a year, and well above the roughly 100,000 jobs that would be needed simply to keep pace with population growth.
Today’s statement on employment “It probably gives the Fed a little more time before cutting rates (we still expect the first cut in June, slightly later than what the markets expect), but in our opinion it will not lead the Fed to a complete rethink of the cutting program”, we read in a signed note from Daniel VernazzaChief International Economist of UniCredit.
According to the expert, primarily the Fed will be guided by measures of spare capacity in the labor market and wage growth. Second, Fed Chair Jerome Powell, speaking at the post-FOMC press conference last Wednesday, said that a strong job market wouldn’t stop them from cutting rates as core inflation has fallen sharply despite strong economic activity and employment. He indicated that only if employment falters would this affect the timing and pace of rate cuts.
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