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    Article #8

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    Laura
    The US economy added 517,000 jobs in January, far more than expected and defying predictions of an economic downturn. While inflation remains high and consumer spending has slowed, the strong job market growth surprised analysts who had warned of recession. The Federal Reserve aims to curb inflation through interest rate hikes, but faces challenges in avoiding an economic contraction if rate increases are too severe. Views differ on whether the strong jobs report indicates the economy remains healthy or raises challenges for reducing inflation.

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    Article #8

    Uploaded by

    Laura
    14 views2 pages
    The US economy added 517,000 jobs in January, far more than expected and defying predictions of an economic downturn. While inflation remains high and consumer spending has slowed, the strong job market growth surprised analysts who had warned of recession. The Federal Reserve aims to curb inflation through interest rate hikes, but faces challenges in avoiding an economic contraction if rate increases are too severe. Views differ on whether the strong jobs report indicates the economy remains healthy or raises challenges for reducing inflation.

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    The US economy added 517,000 jobs in January, far more than expected and defying predictions of an economic downturn. While inflation remains high and consumer spending has slowed, the strong job market growth surprised analysts who had warned of recession. The Federal Reserve aims to curb inflation through interest rate hikes, but faces challenges in avoiding an economic contraction if rate increases are too severe. Views differ on whether the strong jobs report indicates the economy remains healthy or raises challenges for reducing inflation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    14 views2 pages

    Article #8

    Uploaded by

    Laura
    The US economy added 517,000 jobs in January, far more than expected and defying predictions of an economic downturn. While inflation remains high and consumer spending has slowed, the strong job market growth surprised analysts who had warned of recession. The Federal Reserve aims to curb inflation through interest rate hikes, but faces challenges in avoiding an economic contraction if rate increases are too severe. Views differ on whether the strong jobs report indicates the economy remains healthy or raises challenges for reducing inflation.

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    © All Rights Reserved
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    Colegio de los Ángeles #8

    Laura Carolina Hernández Betancurt Grammar 11° 15-01-2023

    Jobs growth surges in US despite slowdown fears

    Jobs growth surged in the US in January, defying fears that the economy is heading for a
    downturn.
    Employers added 517,000 jobs last month, the Labor Department said.
    That was far more than expected, pushing the unemployment rate down to 3.4% - the lowest rate
    since 1969.
    Analysts are struggling to figure out what is happening in the world's largest economy, which is
    being buffeted by a mix of higher borrowing costs and rising prices.
    Many forecasters have warned that the odds of a recession this year are unusually high, pointing
    to data which has indicated a recent pullback in consumer spending, declines in manufacturing
    and a sharp slowdown in home sales.
    A recent survey by research company Morning Consult suggested nearly half of the public thinks
    the economy has already fallen into recession, or a period of decline.
    Despite this, the labour market has remained strong - though the gains in January shocked even
    those economists who have argued against the gloomy predictions.
    "This is a breathtaking number," economist Justin Wolfers, a professor at the University of
    Michigan, wrote on Twitter following the report.
    The hiring in January was widespread, led by bars and restaurants, which are continuing to recover
    from job losses sparked by the pandemic.
    The car manufacturing and tech industries were among the few parts of the economy to report job
    losses.
    Those sectors are sensitive to borrowing costs, which shot up last year, as the US central bank took
    steps to stabilise soaring consumer prices.
    By raising interest rates, the Federal Reserve is aiming to cool demand, easing the pressures
    pushing up prices.
    However, the increase in rates, coming at a time when price increases have started to ease, has
    raised fears that officials will tip the economy into a painful contraction, bringing economic activity
    to an abrupt slowdown that leads to firms to cutting jobs.
    The head of the Federal Reserve, Jerome Powell, said this week he was hopeful the US central
    bank can avoid that scenario.
    But he warned that the Fed was focused on curbing inflation and remained worried that the job
    market was too strong to allow price growth to stabilise around the bank's 2% target.
    Friday's report showed wages rose 4.4% over the 12 months to January.
    Pay increases did not keep pace with price inflation last year and have shown signs of cooling in
    recent months.
    "It's difficult to see how wage pressures can possibly soften sufficiently when jobs growth is as
    strong as this and it's even more difficult to see the Fed stop raising rates and entertain ideas of
    rate cuts when there is such explosive economic news coming in," said Seema Shah, chief global
    strategist at Principal Asset Management.
    Colegio de los Ángeles #8
    Laura Carolina Hernández Betancurt Grammar 11° 15-01-2023

    "The market is going to go through a rollercoaster ride as it tries to decide if this is good or bad
    news. For now, though, looks like the US economy is doing absolutely fine."

    MAIN IDEA

    Jobs growth surged in the US in January, defying fears that the economy is heading for a
    downturn. Analysts are struggling to figure out what is happening in the world's largest economy,
    which is being buffeted by a mix of higher borrowing costs and rising prices. Many forecasters
    have warned that the odds of a recession this year are unusually high, pointing to data which has
    indicated a recent pullback in consumer spending, declines in manufacturing and a sharp
    slowdown in home sales. A recent survey by research company Morning Consult suggested nearly
    half of the public thinks the economy has already fallen into recession, or a period of decline.

    POINT OF VIEW

    I think the despite this, the labour market has remained strong though the gains in January
    shocked even those economists who have argued against the gloomy predictions. The hiring in
    January was widespread, led by bars and restaurants, which are continuing to recover from job
    losses sparked by the pandemic. The car manufacturing and tech industries were among the few
    parts of the economy to report job losses. The market is going to go through a rollercoaster ride as
    it tries to decide if this is good or bad news.

    It's difficult to see how wage pressures can possibly soften sufficiently when jobs growth is as
    strong as this and it's even more difficult to see the Fed stop raising rates and entertain ideas of
    rate cuts when there is such explosive economic news coming in, chief global strategist at Principal
    Asset Management.

    For now, though, looks like the US economy is doing absolutely fine.

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