2:18 p.m. ET, January 5, 2024
2023 was the best year for the labor market since the 1950s
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Friday’s jobs report should only help matters, Treasury Secretary Janet Yellen told CNN in a TV interview Friday.
“The labor market continues to fire on all cylinders,” said Yellen, a former Federal Reserve chair. “Importantly, inflation has come way down over the last six months: The measure that the Fed watches most is running right at their target of 2%, and Americans are beginning to feel that.”
Annual wage growth measured 4.1% last month and has been outpacing inflation since May. That’s a pleasant turn from the prior 25-month stretch of negative growth.
“We had a period [in which] the pandemic was the story, and we had a period in which prices rose a great deal in a short time,” Yellen said. “So, I think that we need to see a sustained period of low inflation with wages growing … more rapidly than inflation for people to feel good about their future prospects.”
The economic data for 2023 has been pretty good, if not completely odds-defying.
The December jobs report “brings to a close an extraordinary year in job creation which saw an increase of 2.7 million in total employment and a record 167,451 million Americans employed,” Joe Brusuelas, RSM US principal and chief economist, wrote in a note on Friday.
“During the past year, unemployment averaged 3.6% and closed the year at 3.7% in what the best year for labor since was the 1950s.”
However, many Americans felt downright lousy during much of it.
On Monday, the latest read on Americans’ feelings about the economy will land when the Federal Reserve Bank of New York will release the findings from its latest Survey of Consumer Expectations.
Friday’s jobs report was yet another indicator that the US appears to have succeeded in achieving a near-impossible feat of having inflation fall without hurtling the economy into a recession.
“What we are seeing now, I think, we can describe as a soft landing,” Yellen said. “My hope is that it will continue.”