Labor market                


By Isaac Cohen*

Error! Filename not specified.Now that the US central bank’s preferred indicator has revealed a decrease in inflation, the attention must turn toward the labor market. Last week, the Labor Department informed that in May the Personal Consumption Expenditures price index increased 2.6 percent from a year earlier, down from 2.7 percent in April. This decreasing pace indicated a reversion of the worrisome upward trend in inflation of this year’s first quarter, which surprised after the sustained decline in prices of the second half of last year.

Therefore employment, the other half of the central bank’s mandate, must come into focus, despite the vigorous perfor*Analista y consultor internacional, ex-director de la Oficina de la CEPAL en Washington. Comentarista de economía y finanzas de CNN en Español TV y radio, UNIVISION, TELEMUNDO y otros medios.mance of the labor market in the last three years. Together with the outstanding creation of a monthly average of 200,000 jobs and the achievement a year ago of the lowest unemployment rate of the last 50 years, at 3.4 percent, it should also be recognized that since then the unemployment rate has slowly crept to 4 percent. True, this unemployment rate still remains within the range of what can be considered “full employment.” Additionally, this increasing trend is far from the “unexpected deterioration” in the labor market, identified by the central bank Chairman Jerme Powell as a reason to “loosen policy.”

The May employment figures will be released next Friday.

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

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