Strong small business hiring complicates Fed’s efforts to cool inflation – Greater Baton Rouge Business Report

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A surge in small business hiring could run afoul of the Federal Reserve’s efforts to cool inflation, The Wall Street Journal reports. 

Small companies have been responsible for all of the job growth in the U.S. since the onset of the pandemic and account for almost four out of five available job openings, according to a Wall Street Journal review of labor data and an analysis by Jefferies.  

Investors are closely tracking the surge in small-business hiring because it could have big implications for financial markets. Small businesses accounted for 78% of the U.S. job listings in November, the latest month for which data is available.

In the sometimes confounding logic of Wall Street, good news for the economy—such as a hiring surge by small businesses—can be bad news for markets. As long as the job market is strong, the Fed will have a hard time slowing the economy and curbing inflation, and will continue raising interest rates. 

Fed Chair Jerome Powell has contrasted the 10.5 million job openings available with data showing the U.S. had 6 million unemployed workers that month as an example of the “economic dislocation” keeping inflation at unacceptably high levels. Read the full story.