Employment is on the rise and reaching record-breaking highs that almost resemble life before the Covid-19 pandemic hit. With unemployment rates down to 3.8% and nonfarm payrolls for the month growing by 678,000, it is suspected that high inflation could be settling down, according to the Labor Department’s Bureau of Labor Statistics report.
While inflation is expected to cool off, there was barely any increase in wages for the month, about a 0.03% raise. The report emphasized the similarities to pre-pandemic levels, but unfortunately, it still showed unemployment to be down by 1.14 million and major labor shortages continue to be a major issue for employers.
Chief Fixed-Income Strategist at Charles Schwab, Kathy Jones, was quoted stating that we are getting to pre-pandemic levels of labor force participation. She anticipates that the level of wage gains will abate. She also believes that job growth is trending positively, which is shown by the counted lower levels of unemployment across the nation – despite the threat of stagflation. This is absolutely essential, as the free market must come into balance in order to stop the rising grasp of inflation on the social classes.
Due to the growing intensity of the Russia-Ukraine war, investors paid little attention to the exciting employment news which lead to stocks falling throughout the day on Friday. Rather, they were busy working to determine when the fall will be corrected, which remains yet to be determined amid the recent developments in the Russian-Ukrainian conflict.
Fortunately, the winter surge of COVID Omicron had little to no effect on employment unlike previous strains of Covid that seen record. This is largely due to the relatively simple and easy to resolve symptoms compared to other strains, as we saw more COVID ward closing than opening this year. While we haven’t yet seen the effects of the BA.2 COVID strain, Omicron was significantly less severe which allowed the economy to continue the recovery process.
Seeing the reports of the rising numbers enkindle optimism throughout the United States despite the rising inflation prices which are at their highest since the early 1980s. It was expected to reach up to 8% in February.
Nick Bunker, economic research director at job search site Indeed, has been found saying that with more progress such as this, we can anticipate further economic progress. He also stated that while employment is continuing to grow and prosper, and joblessness is reaching pre-pandemic levels, we must be wary. The changes can evolve in an instant, especially due to the volatile nature of the pandemic.
He believes that if progress continues to be made, we could return to pre-pandemic levels over the Summer months.
Both the Federal Reserve and Monetary policymakers are watching the emerging employment rates closely as the economy begins to reach full employment. As inflation rates continue to rise from the $5 trillion economic stimulus boost from asset purchases.
In addition to the rising prices, Federal officials are expecting an increase in interest rates that will continue throughout the remainder of the year.
