Hiring has gradually slowed, along with pay growth and job openings. Yet by historical standards, the labor market has remained surprisingly strong, with an unemployment rate still hovering near half-century lows.
“We’ve raised rates by 5 percentage points in 14 months” - from a range of 0%-0.25% to a range of 5%-5.25%, Powell said at a news conference Wednesday. “And unemployment is 3 1/2 percent - pretty much where it was, even lower than where it was, when we started.’’ The Fed chair said he was optimistic that the nation could avoid a recession. Yet many economists are skeptical and have said they expect a downturn to begin sometime this year.
Even consumers, who drive about 70% of economic activity and who have been spending healthily since the pandemic recession ended three years ago, are showing signs of exhaustion: Retail sales fell in February and March after having begun the year with a bang.