US facing greater risk from inflation than labour market: Fed official

By AFP
December 6, 2024

Fed Governor Michelle Bowman said she still sees a 'greater risk' to price stability than to the jobs market - Copyright AFP Eitan ABRAMOVICH

The US continues to face a greater risk from underlying inflation than from any weaknesses in the labor market, despite recent progress, a senior Federal Reserve official said Friday.

The Federal Reserve has a dual mandate from Congress to keep both inflation and unemployment under control, and recently began rolling back high interest rates in order to better support the labor market.

After two rate cuts since September totalling three quarters of a percentage-point, the Fed’s benchmark lending rate now sits between 4.50 and 4.75 percent.

At least one policymaker on the Fed’s rate-setting committee has suggested cautious support for a quarter-point rate cut later this month, while others have maintained a wait-and-see approach, refusing to show their hand ahead of time.

“I continue to see greater risks to the price stability side of our mandate, especially when the labor market continues to be near full employment,” Fed governor Michelle Bowman told a virtual event hosted by the Missouri Bankers Association.

“I think we’re still seeing that the US economy is strong,” added Bowman, a permanent voting member of the Fed’s rate-setting committee.

“But core inflation continues to be elevated,” she said, referring to the underlying measure of inflation which strips out volatile food and energy costs.

The Fed’s favored inflation gauge ticked up slightly in October to 2.3 percent, slightly above the Fed’s long-term target of two percent.

But the so-called “core” inflation figure remained stubbornly high at 2.8 percent, indicating that underlying price pressures

“In my view, upside risks to inflation remain prominent due to possible disruptions in supply chains from labor strikes and from geopolitical tensions that we’re seeing more frequently around the world,” Bowman said.

She added that “increased trade tensions and expansionary government spending,” were also putting pressure on prices, and that fresh inflation data published next week would help support her decision at the rate decision on December 17 and 18.

Financial markets are pricing in a probability of more than 85 percent that the Fed will vote to cut instead of remaining on pause, according to data from CME Group.
U.S. creates a more-than-expected 227,000 jobs in November


The U.S. Bureau of Labor Statistics reported Friday that 227,000 jobs were created in November, beating expectations, as unemployment edged higher as expected to 4.2%. It was 4.1% in October. File Photo by Jim Ruymen/UPI | License Photo

Dec. 6 (UPI) -- The U.S. Bureau of Labor Statistics reported Friday that 227,000 jobs were created in November.

More jobs than expected were created, as the Dow Jones consensus estimate was for 214,000 jobs in November.

"Total nonfarm payroll employment rose by 227,000 in November, and the unemployment rate changed little at 4.2 %," the U.S. Bureau of Labor Statistics said in a statement. "Employment trended up in health care, leisure and hospitality, government, and social assistance. Retail trade lost jobs."

There were 28,000 fewer retail jobs, despite heading into the holiday shopping season.

Unemployment edged higher as expected at 4.2%. It was 4.1% in October.

"Both the unemployment rate, at 4.2%, and the number of unemployed people, at 7.1 million, changed little in November," the BLS said in a statement. "These measures are higher than a year earlier, when the jobless rate was 3.7%, and the number of unemployed people was 6.3 million."

Health care added 54,000, leisure and hospitality 53,000 and government added 33,000 jobs.

Transportation equipment manufacturing jobs increased by 32,000, reflecting workers in that industry coming back to work after a labor strike.

Social assistance added 19,000 jobs.

Average hourly earnings increased 13 cents to $35.61 per hour for nonfarm employees. Wages were up 4% over the past 12 months.

September's job creation numbers from the BLS were revised up by 32,000 to 255,000.

For October revised job creation up by 24,000 to 36,000.

"With these revisions, employment in September and October combined is 56,000 higher than previously reported," the BLS Friday statement said.

In a statement from the White House, President Joe Biden proclaimed, "America's comeback continues."

"Since I took office, the economy has created more than 16 million jobs, with jobs created every single month," he said. "Unemployment has been the lowest on average of any administration in 50 years. Incomes are up almost $4,000 more than prices. While there is more to do to lower costs, we've taken action to lower prescription drug prices, health insurance premiums, utility bills, and gas prices that will pay dividends for years to come."

224,000 file for unemployment benefits for first time


Thousands of job seekers stand at the site of Amazon's future headquarters at a "career day" in Crystal City, Virginia on September 17, 2019. The Labor Department said 224,000 filed for unemployment insurance for the first time last week. 

File Photo by Tasos Katopodis/UPI | License Photo


Dec. 5, 2024 

Dec. 5 (UPI) -- The number of people filing for weekly unemployment benefits for the first time rose 9,000 last week from the period before to a seasonally adjusted 224,000 as the key economic statistic continued its rollercoaster ride at the end of the year.

The new initial filing total for the week ending Nov. 30, was the highest total of people filing for unemployment insurance for the first time since the week ending Oct. 19 with 228,000 making their inaugural claims.

The key figure, watched by the Federal Reserve as a snapshot of workforce stability, reached its highest figure for first-time filers for the week ending Oct. 5 with 260,000. Weekly initial filings have continued to drop unevenly since then to an adjusted 215,000 for the week ending Nov. 16 and Nov. 23.

The four-week moving average for those making initial applications for unemployment insurance was 218,250 for the week ending Nov. 30, an increase of 750 from the previous week's revised average.

The overall number of those filing for weekly unemployment benefits for the week ending Nov. 23 was 1.871 million, according to the Labor Department, a decrease of 25,000 from the previous week's total.

The previous week's total was revised down by 11,000 to 1.896 million, the department said.

The four-week moving average of all workers filing for weekly jobless claims was 1,884,250, a drop of 3,250 from the previous week's revised average.