February 22, 2024

The U.S. economy created 2.7 million jobs in 2023, allowing more people to work than before. Since Biden entered office, about 14.3 million jobs have been added. The big stimulus package passed by the Democratic-controlled Congress during the pandemic helped bolster demand and speed up the labor market recovery. Keeping unemployment low is an effective welfare policy and helps those in need. The unemployment rate is consistently below four percent, and many people have re-entered the labor force, including older workers and new entrants. This benefits disadvantaged groups, including Black Americans and people with disabilities, who are finding and keeping jobs. A low unemployment rate enables lower-paid workers to obtain higher wages as employers compete for workers. Economists have noted a reversal of the previous trend of wage inequality, indicating a positive development. The Federal Reserve’s role in maintaining low inflation and a stable jobless rate is important as they consider their decisions in 2024.