A worker applies paint to a section of a decommissioned wind turbine blade at a manufacturing facility in Avon, Ohio. The US labor market probably remained sturdy while wage gains continued to ease as 2023 drew to a close, setting up for steady economic growth and waning inflation in the coming year. Government data on Friday are projected to show payrolls in the world’s largest economy increased by 170,000 in December. That would cap a year in which some 2.7 million jobs were added. The median forecast in a Bloomberg survey of economists also calls for a 3.9% increase in average hourly earnings from a year earlier, the smallest annual gain since mid-2021. The unemployment rate is projected to tick up to 3.8%. While the pace of hiring is moderating, a resilient labor market supports views that the economy will continue to expand in 2024, albeit at a slower rate. That’s consistent with the Federal Reserve’s latest economic projections . Fed officials also see inflation cooling. On Wednesday, the central bank will issue minutes of policymakers’ December meeting, at which officials signaled an end to their aggressive campaign of hiking interest rates. The Fed held its benchmark rate at the highest level since 2001 and penciled in no further increases. The quarterly projections showed Fed officials expect to lower rates by 75 basis points next year. What Bloomberg Economics Says: “Job gains have been concentrated in just two acyclical sectors — health care and government — with flat to negative growth in most industries. As a result, wage growth will moderate in December. Though a Fed pivot may have stunted recessionary dynamics in the labor market, that dynamic isn’t clear enough yet, and our base case remains a persistent increase in the jobless rate in 2024.” —Anna Wong, Stuart […]
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