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By Staff Reporters

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By the numbers:

• The unemployment rate dropped to 3.5%, the lowest it’s been in 50 years.
• The US added 223,000 non-farm jobs in December. Though job growth slowed from the previous month, the labor market is still going strong.
• In 2022, 4.5 million total jobs were added, compared with 6.7 million in 2021.

But the number that really got people talking was the lower-than-expected month over month wage growth, which slowed to .3% in December and 4.6% annually.

While that might not sound like welcome news to anyone who doesn’t live off a fortune inherited from their robber baron granddad, the folks at the Federal Reserve are most certainly pleased. Rapidly growing paychecks are seen as one of the key drivers of inflation, which the Fed has been trying to tame with aggressive interest rate hikes since early last year.

Economists have dubbed the jobs data a “Goldilocks” situation—not too hot, and not too cold. Since both the labor shortage and the strident wage growth it drove seem to be abating, the hope is that inflation will continue to decline. At the same time, a strong labor market (fingers crossed) might just allow the economy to avoid a recession caused by the interest rate increases.

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Meanwhile, according to Sam Klebanov of MorningBrew, experts expect slowing wage growth to signal to the Fed that it’s time to chill with the aggressive rate hikes. And it’s not just speculation: Here at the Federal Reserve Bank of Atlanta, President Raphael Bostic said that he’d lean toward just a 25 basis point increase for the next interest rate hike (as opposed to 50 basis points) if the labor market continues to cool.

Finally,Wall Street Legend Burton Malkiel says returns over the next decade will likely be 5 to 6 percent.

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Filed under: "Ask-an-Advisor", Accounting, Alerts Sign-Up, Investing | Tagged: BLS, Bureau of Labor Statistics |