2023-10-06 21:46:31
When good news is also bad: the United States created 336,000 jobs in September, more than the 170,000 expected and the average of the last twelve months (267,000), while the unemployment rate is remained stable at 3.8%. This excellent performance of the job market was welcomed by Joe Biden, who praised his record since entering the White House in January 2021: “This represents nearly 14 million jobs – including 815,000 in the manufacturing sector – created thanks to Bidenomics”, the president boasted onthe former Twitter, who later delivered a speech at the White House. “The unemployment rate has remained below 4% for twenty consecutive months; the longest period in fifty years. »
However, this figure complicates the task of the Federal Reserve, the Fed, which must reduce inflation to 2%, which is currently at 3.7% over one year. As a result, the markets are counting on a lasting maintenance of the cost of money at a high level, and ten-year interest rates have soared to 4.85%, one of the highest levels since the period preceding the great financial crisis of 2008, before falling to 4.79% at the close, which remains considerable.
Observers, however, try to reassure themselves by examining the statistics in more detail, such as Jason Furmaneconomist at Harvard and one of the best specialists on the subject: “First reaction to the employment figures: shock. Second reaction: Nervousness. Further thought: This might be very good. 336,000 jobs [et] wage growth which is still moderate. » In fact, the remuneration of American employees increased by only 0.2% between the months of August and September, compared to 0.3 expected, which would mark a deceleration in salary increases, a precursor sign of a market of employment under control.
The risk of stagflation
The climate changed profoundly this summer, when the United States realized that artificial intelligence would not immediately boost the economy even if it is its new frontier and that the Fed would hold on to bring inflation down to 2%. She does not want to repeat the mistakes of the 1970s and 1980s which led to letting go too soon and causing a mix of inflation and stagnation known as stagflation.
Distrust is in order, with the automobile strike which will lead to wage increases of more than 20% over four years, the decoupling with China which leads to an increase in costs and the rising budget deficit, which should reach 6 .5% of GDP for the financial year ending September 30, 2023. The central bank plans to keep the cost of money high for a long time. Its key rates have already gone from zero in March 2021 to 5.25% currently.
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