The Fed: The U.S. jobs market is too ‘strong,’ the Fed says. So expect rising unemployment.

by | Nov 4, 2022 | Stock Market

The number of new jobs created in October could fall to a nearly two-year low, but it still won’t be slow enough for Federal Reserve Chairman Jerome Powell. After the Fed raised U.S. interest rates again on Wednesday, the central bank chief repeatedly stressed that the labor market is just too strong.

“The labor market remains extremely tight,” he said at the start of his regular press conference. Then a few minutes later he said, “The labor market continues to be out of balance.” If that wasn’t enough, Powell later declared that “the labor market is just very, very, very strong, very strong.” And to top it off, he added: “The broader picture is of an overheated labor market where demand substantially exceeds supply.”  The point wasn’t lost on Wall Street. The chairman clearly signaled he wants to see hiring slow dramatically and unemployment rise before the Fed backs off on the most aggressive series of rate hikes in decades. The October employment report, due Friday morning, is unlikely to provide much comfort for Powell. The U.S. employment report is forecast to show an increase of 205,000 new jobs and a 3.5% unemployment rate. Such an increase would be the smallest since the end of 2021, but from a historical standpoint, it will still be a strong employment report. The U.S. added an average of 200,000 jobs a month from 2015 to 2019, for instance. What’s so bad about a robust jobs market and the lowest unemployment rate in more than 50 years? The Fed is worried a labor …

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