Strong jobs data released ahead of Fed meeting

Markets are tense about how the Federal Reserve (Fed) will react to unexpectedly strong US job market data for December.

According to the US Bureau of Labor Statistics, the number of job openings on the last business day of December stood at 11 million. While vacancies increased in retail trade and construction, there was a significant decline in the information sector, which includes many technical jobs.

The five-month high was the largest increase since July 2021, and exceeded all estimates, with an average estimate of 10.3 million. In a market where demand far exceeds supply, the risk of sustained upward pressure on wages could fuel inflation.

As a result, the consummate appetite for labor displayed by the unexpected increase in open positions could influence the Fed later today.

anticipation before the Fed meeting

The market had a relatively normal response to adverse news, with the S&P 500 falling and Treasury yields rising. The same was the case with the crypto markets, bitcoin and ethereum, both of which fell less than 1%. However, one reason for the muted reaction is that markets are anticipating comments from Fed Chair Jerome Powell.

The Federal Reserve will hold its first meeting of the year today. Markets widely expect that the monetary authority will continue to slow down the pace of its interest rate hike. An increase of 0.25% is now expected, up from four consecutive 0.75-percentage-point increases, to 0.5% in December. While this is still widely anticipated, negative market sentiment reflects heightened tensions.

Fear of recession of economists

One metric Fed officials are focusing on is the ratio of openings to unemployed people. Around 1.2 before the pandemic, it rose to 1.9 in December from 1.7 a month earlier.

The exceptionally high number of job opportunities is one reason the Fed believes its accommodative policies can appropriately address inflation without creating high unemployment. Unfortunately, many economists expect the Fed to push the economy into recession in the coming year.


BeInCrypto has reached out to the company or individual involved in the story for an official statement regarding the recent developments, but has not yet received a response.

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