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US hiring stays brisk as employers add 223,000 jobs

January 6th, 2023 by WCBC Radio

America’s employers added a solid 223,000 jobs in December, evidence that the economy remains healthy yet also a sign that the Federal Reserve may still have to raise interest rates aggressively to slow growth and cool inflation.

The December job growth, though a decent gain, amounted to the lowest monthly increase in two years. The unemployment rate remained fell to 3.5%, matching a 53-year low, the Labor Department said Friday.

Last month’s job growth capped a second straight year of robust hiring during which the nation regained all 22 million jobs it lost to the COVID-19 pandemic. Yet the rapid hiring and the hefty pay raises that accompanied it likely contributed to a spike in prices that catapulted inflation to its highest level in 40 years.

The picture for 2023 is much cloudier. Many economists foresee a recession in the second half of the year, a consequence of the Fed’s succession of sharp rate hikes. The central bank’s officials have projected that those increases will cause the unemployment rate to reach 4.6% by year’s end.