New data from the US labour market surprised positively. The February unemployment rate reached a two-year low and is now at the level before the coronavirus pandemic broke out.
In February, 678 000 jobs were created in the United States. The US labour market thus continues to positively surprise analysts’ estimates. The US unemployment rate thus fell by 0.2 percentage points to 3.8 per cent in February. There is thus increasing optimism that the world’s strongest economy can weather the threats arising from the outbreak of war in Ukraine and dramatically rising commodity prices, especially oil and gas, without major difficulties.
Wages in the United States rose 5.1 per cent year-on-year in February, but that was not nearly enough to offset the rate of price increases, which reached 7.5 per cent in January. Thus, the purchasing power of wages in the US fell by more than two per cent year-on-year.
The latest developments in the labour market are thus reinforcing analysts’ belief that the US Federal Reserve will soon move to raise interest rates. “It should have done it a long time ago,” Chris Low, chief economist at New York-based FHN Financial, told Reuters.
