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The Fed is targeting an annual inflation rate of 2%
Although inflation is a normal part of an economy, the current rate is well above the Federal Reserve’s 2% target.
So far this year, the Fed’s rate-setting committee raised a key interest rate six times in its continued efforts to bring down the rate of inflation. The general idea is that by increasing the cost of borrowing, expenses will decrease and there will be less inflationary pressure due to lower consumer demand.
It can also lead to job losses. Nevertheless, although there was an increase in layoffsthe unemployment rate is relatively low at 3.7%, according to the latest reading.
Boston Federal Reserve Chair Susan Collins said she was confident on Friday that inflation could be brought under control without a sharp rise in unemployment.
“I remain optimistic that there is a path to restore labor market balance with only a modest increase in the unemployment rate – while remaining realistic about the risks of a larger downturn,” Collins said. in remarks prepared for a Boston Fed economic conference.
While the job market may look different in the coming months, the current shortage of workers is a challenge for businesses: 75% of WTW survey respondents said they struggled to attract and retain talent, d where larger salary budgets. Employers also offer more flexibility in the workplace (67%) and place more emphasis on diversity, equity and inclusion (61%).
“As inflation continues to rise and the threat of an economic slowdown looms, companies are using a range of measures to support their workforce during this time,” said Hatti Johansson, research director at WTW.
The WTW report is based on a survey conducted from October 3 through November 4 and includes responses from 1,550 US organizations.