The first week of 2022 brought a middling jobs report, with solid annual wage growth of 4.7% but a disappointing number of new jobs. Employment rose by just 199,000 in December, far less than economists expected. The economy created a record-breaking 6.4 million jobs in 2021, but that was after 9.4 million jobs disappeared in 2020. Total employment is still about 3.4 million jobs below the pre-pandemic peak.
With that out of the way, there’s bigger news that could be the most potent economic force in 2022: The Federal Reserve plans to tighten monetary policy, and this time, it really means it. Minutes from the Fed’s mid-December meeting, released Jan. 5, reveal that the bank plans to raise interest rates more aggressively than previously expected, and perhaps make other moves to settle a bubbly financial sector.