Last month, the nation’s employers saw a strong increase of 216,000 jobs, indicating that the American job market is still strong despite a significant rise in interest rates.

The Labor Department’s report on Friday revealed that the number of jobs added in December surpassed the 173,000 added in November. The unemployment rate held steady at 3.7%, marking the 23rd consecutive month that it has remained below 4%.

The most recent statistics indicate a slowing economy and job market, returning to levels seen before the pandemic. Employment numbers are stable, and although there are fewer job listings, there are not significant layoffs occurring.

Even though unemployment rates are low and inflation is stable, surveys indicate that a large number of Americans are unhappy with the state of the economy. This discrepancy, which could impact the 2024 elections, has left experts in both economics and politics perplexed.

One important element, however, is the frustration of the general public with increased prices. Despite a gradual decrease in inflation over the past 18 months, prices remain 17% higher than they were before the surge in inflation.

Fed Chair Jerome Powell warned of hard times ahead after the central bank began jacking up interest rates in the spring of 2022 to attack high inflation. Most economists predicted that the much higher borrowing costs that resulted would cause a recession, with layoffs and rising unemployment, in 2023.

However, the predicted economic downturn did not occur and there are no signs of one coming in the near future. While the job market is not as strong as it was in the booming years of 2022 and 2023, there are still enough job opportunities to maintain a low unemployment rate.

The job market has remained strong, paralleling the stability of the economy as a whole. Contrary to expectations of a recession, the gross domestic product (GDP) in the United States grew at a robust rate of 4.9% annually from July to September. This growth was largely fueled by strong consumer spending and business investment.

At the same time, average hourly pay has outpaced inflation over the past year, leaving Americans with more money to spend. Indeed, as they did for much of 2023, consumers, a huge engine for U.S. economic growth, hit the stores in November, shopped online, went out to restaurants or traveled.

The Federal Reserve has increased its benchmark interest rate 11 times since March 2022, reaching a peak of 5.4%, the highest in 22 years. While this has resulted in higher borrowing costs for businesses and individuals, it is a step towards successfully controlling inflation.

In November of the previous year, there was a 3.1% increase in consumer prices, a significant decrease from the highest level in 40 years, which was 9.1% in June 2022. The Federal Reserve is pleased with the current progress and has not raised interest rates since July. They have also indicated that they plan to decrease rates three times this year.

Apart from a significant impact on the housing market, higher rates have not caused much harm to the overall economy. Several industries, such as healthcare and government, have shown resilience to the effects of higher interest rates.

The decrease in job opportunities in the labor market does not necessarily indicate an upcoming recession. While a decline in job growth would usually be worrisome, in this situation, where inflation remains above the Fed’s annual target of 2%, a slower rate of hiring is viewed as beneficial for the economy.

A decrease in the need for employees typically reduces the strain on employers to increase wages in order to retain or recruit workers, and to offset their increased labor expenses by increasing prices for customers.