The Federal Reserve is on track to raise interest rates as early as March, economists say, as surging wage growth and rapidly sinking unemployment dominate the US jobs market.
Figures released on Friday showed a sharp slowdown in the number of new jobs in December. Just 199,000 positions were created, less than half the number expected by analysts and well below the monthly average of 537,000 in 2021.
But some economists nonetheless pulled forward their bets on interest rate rises, focusing instead on rising wages and a declining unemployment rate, which fell to 3.9 per cent in December — close to the pre-pandemic level of 3.5 per cent. Average hourly earnings rose 0.6 per cent from the previous month, which translates to an annual gain of 4.7 per cent.