Unemployment In America: The US unemployment rate fell to a 50-year low in December, a sure sign of economic recovery from the effects of the COVID-19 pandemic and the recent rise in global oil prices due to the Ukraine war, but inflation remains a major concern. The challenge remains. US President Joe Biden reminded the country in his remarks on Friday that he celebrated the new report on jobs.
Joe Biden said, “Today’s report is great news for our economy and more proof that my economic plan is working. The unemployment rate is the lowest it has been in 50 years. We’ve had two more times of job growth in history.” We have had our strongest years yet and we are seeing a transformation.”
We have to help American families – Biden
Biden cautioned, “We still have work to do to reduce inflation and help American families struggling to make ends meet. We are moving in the right direction.” Inflation stood at 7.1 per cent for the 12 months ending November, according to the Labor Department’s latest count, with a new estimate expected later in January.
Inflation at 40-year high
Last June, the US Federal Reserve Bank began intervention as inflation shot up by a whopping 0.75 percent to a 40-year high of 8.6 percent, the highest since 1994. It was half a percentage point at the end of December. There may be some more increase in it in the next six months.
These hikes are aimed at curbing spending by making credit costlier, but there are fears that they could restrict production. If consumers don’t buy, companies won’t have much to sell and production will be cut. This will increase recession, which will slow down the economy.
The Fed is set to announce another rate hike after the January 31-February 1 meeting of its top decision-making body. But there are indications that the hike could be less in the range of quarterly percentage points, according to the minutes of the body’s December meeting released this week.
‘Communication is important’
The minutes stated, “Most participants emphasized the need to maintain flexibility and optionality while moving policy toward a more restrictive stance.” It further stated, “Participants reaffirmed their strong commitment to bringing inflation back to the (Federal Open Market) Committee’s objective of 2 percent. Many participants emphasized that it will be important to communicate clearly.” Because the reduction in the pace of rate increases does not indicate a weakening of the Committee’s resolve to achieve its price stability objective.”
The Biden administration also targeted inflation through the ambitious $370 billion Inflation Reduction Act, which aims to reduce the deficit by higher taxes on the super-wealthy, expanded health care benefits, lower prices for some prescription drugs and clean Investing in energy is a historic effort. Meanwhile, the real battle over inflation is being fought at gas pumps and grocery stores. Gas prices continue to rise and fall due to the Ukraine war, despite several releases of funds from the US strategic reserve ordered by President Biden.
Mass layoffs in Facebook-Twitter
The direct result of economic uncertainties is not completely linked to inflation. There have been large-scale layoffs in the tech sector like Facebook and Twitter in November. More than 125,000 technical workers were laid off in the year 2022 and it continues. Amazon announced on Thursday that it was going to lay off 18,000 employees. This is the biggest layoff ever and comes a day after online clothing company Stitch Fix laid off 20 percent of its employees and Krypto is planning to lay off another 30 percent.
Employees were hired in Corona
These tech companies hired a large number of employees during the Kovid-19 pandemic, as online usage by people peaked. They work, study, shop and play online from home. The return to normalcy has forced these companies to lay off employees.
Indian H-1B visa holders
There are also many Indian H-1B visa holders among them. The layoff has been painful for them as it foreshadows the end of their stay in the US if they are not able to find another employer within 60 days. Those who have been in the US for a long time and are queuing up for green cards to get permanent residency and their children, who were born and raised here, know no other country as home.
As reflected in the unemployment record, they have a better chance of finding an alternative employment in the job market. For example, industry experts predict better career options for technical professionals in non-technical companies, such as the healthcare and hospitality sectors.
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