November 22, 2024

Taylor Daily Press

Complete News World

‘The pressure on the US labor market is incredible’

‘The pressure on the US labor market is incredible’

International•5 Dec ’22 at 12:59Author of the book: Remy Cook

Economist Arnott Boot observed there that the labor shortage in the United States is running parallel to that in Europe. “It was mind-blowing.”

Help was sought in the United States. (Nathan Dumlau/Unsplash)

“The pressure on the labor market in America is really incredible,” Boot says. “A report came out last Friday that said 200,000 jobs would be added in November, but it ended up being 260,000.”

Also Read | ‘Growth potential has slowed in the United Kingdom’

According to Boot, if we look at the year 2022 as a whole, we can see this upward trend even more clearly. ‘That would add an average of 370,000 jobs every month,’ he continues. And to bring about the cooling of the U.S. economy, the number of jobs needed would essentially be reduced by 100,000 per month. So the US is in a position to raise interest rates further to cool the economy.’

in the wrong way

At the same time the US economy is definitely cooling. The central bank had, among other things, a target for the labor market, but according to Boot, that could be redrawn. As Fed boss Jerome Powell put it, he wants to “see how far he can go with rate hikes.” Launch: ‘He said so, those are sharp statements. Labor demand is higher than expected, but slightly weaker compared to last year and the start of this year.’

Also Read | Ex-Fin Minister: ‘Central Bank should increase interest rate further’

According to Boot, the prospect of interest rates rising again should be familiar to markets. But you won’t see it in the market. You rarely see the dollar strengthen. A little weak. An increase in interest rates leads to a higher dollar, so for some reason the financial market functions only weakly. But the message from America is that things are still tense, and that’s consistent with what we’re seeing in Europe.

See also  From Concept to Creation: Designing Your Signature Acrylic Nails

Soft landing

Boot thinks the parallel would be to investigate the so-called soft landing. This means that central banks do not raise interest rates to an extreme level, but allow the economy to cool. With no real decline, it’s becoming an ever-increasing question mark.