After months of talk about recession, last Friday’s jobs report caught many off guard with epic jobs data reflecting an astonishing labor market. The Fed has worked to slow things down, and for the most part, it is working. The spiking inflation rate has curbed, but some job sectors are cranking up, in stark contrast to what the recovery looked like two decades ago.
Week after week, news reports have shed light on vast layoffs in the tens of thousands. While economists expected jobs growth to decelerate, they have instead surged ahead, adding more than half a million jobs in January. The unemployment rate has plummeted to 3.4%, a level we haven’t seen since 1969.
A hiring slowdown was supposed to come with the Fed’s aggressive interest tightening, but it hasn’t materialized—leaving officials vexed.
Employers are also scratching their heads a bit. Wages are rising slower than inflation, and HR professionals say inadequate compensation is the biggest reason employees are leaving, according to research released last quarter by the SHRM Research Institute.