In the late 1970s, Congress passed a law that clarified the mission of the Federal Reserve to focus on four primary goals: full employment, economic growth, price stability, and a healthy trade balance.
Last month, the unemployment rate hit 3.5 percent, reaching the historically low level seen in February 2020. This low rate has supported nominal wage increases, which means that workers are being paid more but that those increases do not reflect boosts in their disposable income, or what are called “real wages.”
The December report could be a sign that the Federal Reserve could continue to push up rates, but some economists believe that more data is needed before a final decision is made. Regardless, the central bank’s own projections show that rates will be increased in 2023. Read our full coverage for how high they are expected to go.