US President Joe Biden realizes this and reminds the country of this in statements on Friday while he cheered the new job report.
“The report released today is good news for the economy and further proof that our economic strategy is effective. Since 1950, the unemployment rate has never been lower.
The two most successful years for job growth in record have just ended. We are also witnessing the shift to stable and consistent growth that I’ve been anticipating for months “he says.
But, as Biden pointed out: “We still have hard work to do to reduce inflation and assist American people who are struggling to make ends meet. Nevertheless, we are headed in the right path.“
The Labor Department’s latest notable assessment of inflation for the 12-month period that finished in Nov reported it to be 7.1%. A new estimate will be project later this month.
The US Fed Reserve Bank began intervening in June of 2022 as inflation surged to a 40 year record of 8.6% and major rate hikes of 0.75 percent, the biggest since 1994, were imposed.
Over the following few months, there would be another six hikes of varied proportions. The last of which being a half-point increase in December.
These price increases are intend to reduce expenditure by raising the cost of credit. However, there are concerns that they could ultimately lead to output restrictions. Because if consumers don’t buy, businesses won’t have a lot to sell and it will reduce production. Which would slow the economy and trigger on a recession.
What to Expect at first FED Meeting of 2023?
After its top policymaking body’s FED meeting on Jan 31–Feb 1, the Fed is expect to declare another rate hike. But the results of the board’s December meeting. Which were made public this week, show that there are signs that increases may be less, in the level of quarter basis points.
The meetings stated that “most participants underlined the need to maintain flexibility & optionality when transitioning policies to a more restrictive approach.” Implying Fed officials were willing to scale off the hikes.
However, the hikes will go on. According to the minutes, “Participants underlined their robust commitment to bringing inflation back toward the Federal Open Market Committee’s 2% target.” “Several participants emphasised the need to clearly explain that a slowdown in rate increases was not a signal that the Committee was less determined to accomplish its goal of stable prices.“
The $370 billion Inflation Reduction Act, that tries to lower deficit by increased taxes upon super-rich. Extend health coverage, reduce prices for some prescription pharmaceuticals. And make a historic investment in renewable energy, is another attempt at combating inflation by the Biden administration.
While this has been happening, the true fight against inflation has remained it at grocery store & gas station. Despite multiple rounds of releases from the US strategic reserves directed by President Biden. Gas prices continue to climb and dip, driven up by the Ukraine crisis.
Big layoffs in the tech world, started with Facebook & Twitter in Nov, have been a direct result on the economic uncertainty, though they are not only related to inflation. In 2022, more than 130,000 tech workers lost their jobs. Amazon remarked Thursday that it is making its largest-ever layoffs, laying off 18,000 employees.
US Fights for Inflation Pullback
The day before, online clothes retailer Stitch Fix revealed that 20% of its personnel will be let go. And cryptocurrency lender Genesis announced that it would be making a 30% reduction.
During the Covid-19 epidemic, when online usage rose as more people worked, learned, shopped, and played from home. These tech giants aggressively recruited new employees.
These companies’ overinflated employees became unsustainable once normality returned, especially as worries about a looming economic downfall mounted.
They include a large number of Indians on H-1B visas. For them, the layoff has been distressing because, if they cannot find another job within 60 days. Their tenure in the US would come to an end.
The fact that their children, who have been raise and born here, have never known any other country as home indicates an even more terrible situation for those waiting in line for a Green card. Which grants permanent United states residency.
The record unemployment rates indicate that the job market is improving, giving them a better chance of obtaining alternative jobs. Industry analysts predict that non-tech organisations, like those in the healthcare and hotel industries, will offer better employment opportunities for tech workers.