The Balance Today: News You Need To Know on Jan. 6, 2023

Another strong jobs report eases recession fears

A man wearing a hardhat adjusts a machine tool.

Vithun Khamsong / Getty Images

If you were worried about an imminent recession, you can stop worrying—at least for now. The Labor Department released its latest jobs report this morning, showing that not only did the U.S. economy add 223,000 jobs last month, but the unemployment rate dropped to 3.5% from 3.7% the month prior. The numbers suggested the labor market is stronger than economists expected, with the unemployment rate originally forecasted to remain unchanged at 3.7% while the economy was expected to add just 200,000 jobs. 

Today’s report is one of the first major pieces of economic data being released in the new year and is being closely watched as investors, economists, and others have been growing increasingly concerned that a recession could hit in 2023. But with unemployment at a low rate, we might be able to shake off those worries for now.

Stocks surged after the strong report, as investors shook off concerns of a recession. But as we’ve written previously, we aren’t out of the woods just yet. As the economy continues to move along at such a strong pace, the Federal Reserve is being given even more room to continue to stay aggressive in its inflation fight. 

The next policy meeting from the central bank kicks off at the end of the month, and as we get closer to the date, stocks could take us on a bumpy ride as investors get anxious about how aggressive the Fed will be going forward. Rate hikes will likely help our wallets by alleviating inflation, but could sting us elsewhere as bank loans become more and more expensive.

Next week all eyes will be on inflation data, when the Labor Department releases the Consumer Price Index (CPI), which will show how far inflation has fallen after a series of jumbo-sized rate hikes from the Fed.

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  1. Bureau of Labor Statistics. “Employment Situation Summary.”

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