https://sputnikglobe.com/20221011/us-jobless-rate-of-55-a-fair-trade-off-for-2-inflation---imf-chief-economist-1101741698.html
US Jobless Rate of 5.5% a Fair Trade-Off For 2% Inflation - IMF Chief Economist
US Jobless Rate of 5.5% a Fair Trade-Off For 2% Inflation - IMF Chief Economist
Sputnik International
WASHINGTON, (Sputnik) - A 5.5% unemployment rate would be “a fairly benign outcome” for returning US inflation to the Federal Reserve's target of 2% per year... 11.10.2022, Sputnik International
2022-10-11T22:51+0000
2022-10-11T22:51+0000
2022-10-11T22:51+0000
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The unemployment rate, which stood at 3.5% at the end of September, is expected to grow by two percentage points between 2023 and 2024, Gourinchas said in forecasts made during the World Bank/IMF annual meetings in Washington this week.The Fed defines a jobless rate of 4% and below as “maximum employment.”Gourinchas also said inflation will not return to the Fed’s target of 2% by 2023, although the US central bank will be closer to the target in 2024.Inflation, as measured by the Consumer Price Index (CPI) grew by 8.3% in the year to August, moderating from a four-decade high annual growth of 9.1% in the 12 months to June.“The fight against inflation by central banks will last until 2024,” he added.The Fed has said that a robust labor market and wage growth were among the major factors contributing to inflation hovering near four-decade highs.The labor market has been the juggernaut of the US economy, spearheading its recovery from the two-year long coronavirus pandemic.Joblessness among Americans reached an all-time high of 14.8% in April 2020, with the loss of some 20 million jobs after the COVID-19 breakout. Since then, the Labor Department’s non-farm payrolls report has reported hundreds of thousands of job additions every month. US average hourly earnings have risen without stopping since June 2021.Since March, the Fed has raised interest rates by 300 basis points in its bid to fight inflation and is expected to add another 125 basis points to rates before the end of the year.
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US Jobless Rate of 5.5% a Fair Trade-Off For 2% Inflation - IMF Chief Economist
WASHINGTON, (Sputnik) - A 5.5% unemployment rate would be “a fairly benign outcome” for returning US inflation to the Federal Reserve's target of 2% per year versus the current rate of above 8%, International Monetary Fund (IMF) Chief Economist Pierre-Olivier Gourinchas said.
The unemployment rate, which stood at 3.5% at the end of September, is expected to grow by two percentage points between 2023 and 2024, Gourinchas said in forecasts made during the World Bank/IMF annual meetings in Washington this week.
The Fed defines a jobless rate of 4% and below as “maximum employment.”
Gourinchas also said inflation will not return to the Fed’s target of 2% by 2023, although the US central bank will be closer to the target in 2024.
Inflation, as measured by the Consumer Price Index (CPI) grew by 8.3% in the year to August, moderating from a four-decade high annual growth of 9.1% in the 12 months to June.
“The fight against inflation by central banks will last until 2024,” he added.
The Fed has said that a robust labor market and wage growth were among the major factors contributing to inflation hovering near four-decade highs.
The labor market has been the juggernaut of the US economy, spearheading its recovery from the two-year long coronavirus pandemic.
Joblessness among Americans reached an all-time high of 14.8% in April 2020, with the loss of some 20 million jobs after the COVID-19 breakout. Since then, the Labor Department’s non-farm payrolls report has reported hundreds of thousands of job additions every month. US average hourly earnings have risen without stopping since June 2021.
Since March, the Fed has raised interest rates by 300 basis points in its bid to fight inflation and is expected to add another 125 basis points to rates before the end of the year.
