Tausi Insider

U.S. employers hired more workers than expected in November and increased wages, shrugging off mounting worries of a recession, but that will probably not stop the Federal Reserve from slowing the pace of its interest rate hikes starting this month. Despite the strong job growth, some details of the Labor Department’s closely watched employment report on Friday were a bit weak, which economists said could be flagging upcoming labour market weakness. Household employment decreased for a second straight month. About 186,000 people left the labour force, keeping the unemployment rate unchanged at 3.7 per cent. Labour market tightness and strength keeps the Fed on its monetary policy tightening path at least through the first half of 2023, and could raise its policy rate to a higher level where it could stay for sometime. It also underscores the economy’s resilience heading into was is expected to be a tough year. “November’s labour market report was clearly bad news for the Fed’s war on...

U.S. consumers are becoming more confident that price pressures will ease considerably over the next 12 months, with a survey on Friday showing their one-year inflation expectations falling in January to the lowest level since the spring of 2021. But the road to low inflation will be bumpy as other data on Friday showed import prices unexpectedly increasing in December after five straight monthly decreases, boosted by higher costs for natural gas and food. Overall inflation is retreating as the Federal Reserve’s aggressive interest rate increases cool demand, and bottlenecks in the supply chain ease. “The Fed will be happy to see short-term expectations reverting back to more normal levels,” said Shannon Seery, an economist at Wells Fargo in New York. “That all supports views inflation is indeed slowing, but it’s going to take some time for it to get back to the 2 per cent target that the Fed is looking for.” Year-ahead inflation expectations dropped to a preliminary reading of 4.0 p...