Despite high interest rates and recession concerns, the hiring market remains strong—with up to 263,000 new jobs added in November and a steady unemployment rate of 3.7%, according to a report from the Bureau of Labor Statistics.
The results of the latest job report make the Fed's fight against inflation more challenging. The latest data could force the Fed to continue on its path of aggressive rate hikes, despite talk that they could be slowing. "Ironically, by pushing the [Fed] to raise rates further, continued strong job growth makes a near-term recession more likely," Gus Faucher, chief economist of PNC Financial Services Group told USA Today.
Unemployment has been primarily contained to the tech industry, specifically with Meta, Twitter and Amazon layoffs. Nearly 52,771 layoffs were announced by tech firms in November—the highest monthly total since 2000, according to Challenger, Gray & Christmas data, per CNN Business. But with labor shortages caused by pandemic fallout, economists say companies overall are less likely to let their employees go even if the economy falls into a recession.
"The labor market shows only tentative signs of rebalancing, and wage growth remains well above levels that would be consistent with 2% inflation over time," Fed chairman Jerome Powell told CNN. "Despite some promising developments, we have a long way to go in restoring price stability."