J.P. Morgan: The US labour market is extremely tight

J.P. Morgan: The US labour market is extremely tight

April 11, 2022

Economy
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The US labour market continues to look extremely tight with the unemployment rate now at just 3.6%. This highlights the rapid recovery in jobs in the two years since the pandemic began.

After the 2008 recession it took over seven years for the unemployment rate to recover to pre-recession levels. The speed at which the labour market has recovered this time has surprised many, including the US Federal Reserve (Fed). Wage growth is up to around 6% year on year, which is fuelling inflation. And with inflation well above the Fed’s target, policy tightening is set to ramp up in the coming months. The Fed will reduce the size of its balance sheet starting in May, while the likelihood of a 50 basis point rate rise at each of the next two meetings has risen, with the Fed keen to get to a neutral stance on policy sooner rather than later.

11042022 J.P. Morgan

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