(PatriotWise.com) — US hiring has risen to higher levels than predicted. Private sector employment rose by 242,000 jobs in February and reports also state that consumer confidence has remained high but pay growth has slowed to 7.2%. Nela Richardson, chief economist at payroll firm ADP said, “The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near-term.”
Since last year, the US central bank has increased interest rates eight times in an attempt to fend off inflation and Federal Reserve Chairman Jerome Powell has warned that this is likely to continue. Powell said interest rates are “going to be very important in our assessment of the higher readings that we have very recently received and of the overall direction of the economy and of our progress in bringing inflation down.” He concluded by saying that rates will be higher than expected.
The majority of new jobs have been generated by the leisure and finance industries. Small businesses however continue to shed jobs, as they have since August 2022. The Financial Times says the gains indicate a reduction in unemployment to 3.4%, the lowest in decades.
Last year, the Conference Board predicted a recession in the US in the early part of 2023 and also said it is unlikely that the Federal Reserve will reduce interest rates. It also predicted that the economy would not return to pre-pandemic levels until 2024.
The latest economic news comes as President Biden releases his plans to increase taxes to plug the national deficit. Biden said he will reduce it by $4 trillion over the next decade. The progressive budget announcement was couched in left-wing terminology with the word “transgender” appearing eight times, and “equity” mentioned 63 times. It also takes aim at fossil fuel subsidies. The President is likely to face a fierce battle on Capitol Hill to pass his proposals. Senate Minority Leader Mitch McConnell said, “Thank God the House is Republican.”
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