What’s Happening with Employment and Inflation? Sundae’s Market Minute Has You Covered
Strong employment numbers are a great sign for the economy and the housing market as a whole.
After months of speculation and reading between the lines, interest rate raises seem inevitable. There have already been signs pointing towards this such as rates exceeding 4 percent for the first time since 2019.
At this point, we are pretty certain the rates are going up on March 16. The Fed is paying close attention to two key indicators as they make this decision: jobs and inflation. Core inflation rose at its fastest level since 1982, which isn’t great, but January’s employment numbers offer reason for optimism.
Employment numbers are promising
Recently, there were adjustments showing that employment numbers are actually better than we initially thought.
In January, employment grew by a strong 467,000. Even better, December’s employment was revised from 199,000 to 510,000 and November’s from 249,000 to 647,000. This means Omicron had very little impact on the labor market.
A strong job market is attractive to employees
Over the past few months, employment numbers have shown that Americans are entering the workforce.
In fact, the labor force participation rate rose from 61.9 percent to 62.2 percent. This indicates that workers returned from the sidelines to find employment. It’s also promising that wages increased by 5.7 percent year-over-year, almost matching the inflation rate. CNBC expects employees to benefit from this trend throughout 2022.
Stay tuned for more to come
Employment numbers and pay increases bode well for the job market. This serves as a positive indicator for the strength of the economy. Moving forward, pay close attention to what ends up happening with interest rates. Even if there are increases of up to a full percentage point, we expect the housing market to remain strong.
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