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A recent wave of surprisingly solid economic data reveals that the U.S. economy is in a far stronger position than most economists expected.

Friday’s stunning jobs report, coupled with a surprising jump in job openings, has forced experts to recalibrate their expectations for an economy being slowed by the Federal Reserve’s interest rate hikes.

Here’s what we learned about the U.S. economy over the past week: Companies are still eager to hire A hiring sign is displayed in a window of a store in Manhattan on December 02, 2022 in New York City. (Photo by Spencer Platt/Getty Images)

The U.S. added 517,000 jobs in January, blowing away analyst projections, while the unemployment rate dipped to 3.4 percent, the lowest in 54 years. Economists had expected unemployment to rise. 

Several sectors that had been seeing an apparent slowdown, including retail and construction, added jobs at a faster rate than last year’s monthly average. The average workweek totaled 34.7 hours, the highest since March 2022, indicating massive demand for workers. 

That means the nation clearly isn’t in a recession, despite the Federal Reserve’s efforts to weaken the labor market by hiking employers’ borrowing costs. 

“For now, it’s a good sign that the Fed hasn’t broken the economy yet. The best-case scenario is a soft landing, and it’s still in play,” Callie Cox, U.S. Investment Analyst at eToro, said in a note.

In another surprising figure, Labor Department data released Wednesday showed that the U.S. had a near-record 11 million job openings at the end of December, up from 10.4 million the month prior. Economists expected openings to fall on a month-to-month basis.

The shortfall of workers, driven in part by 2 million early retirements during the pandemic, boosts workers’ leverage over wages but also reduces the supply of certain goods and services, leading to higher prices. 

Lisa Lighter, 52, told The Hill she struggles to find workers for her small business, A Day In Our Shoes, which helps Philadelphia-area parents secure critical services for their disabled children. The labor shortage forces countless parents with a disabled child who go without those services, Lighter said.

“I work long hours myself because finding qualified help to do my administrative work is challenging. Many never even return emails, and I pay above market rate,” she said. 

Friday’s booming jobs report comes with caveats. Economists expect the jobs number to be revised down because companies added fewer holiday employees this year and the U.S. experienced an unusually warm January. The Bureau of Labor Statistics usually accounts for a rush of post-holiday layoffs and lower economic activity during a cold but uneventful month by adjusting January jobs gains higher.

“The BLS jobs report for January was VERY strong. So strong, I don’t believe it. The BLS is likely having measurement issues. Most likely, difficulty seasonally adjusting the data, which is especially important in January,” Moody’s chief economist Mark Zandi wrote on Twitter Friday.  Layoffs are lower than the headlines make it seem A sign is shown on a Google building at their campus in Mountain View, Calif., on Sept. 24, 2019. (AP Photo/Jeff Chiu, File)

Some of the nation’s largest and most well-known companies, including Google, Microsoft and FedEx, announced mass layoffs in January, fueling recession fears.  

But the data shows that most companies aren’t letting workers go. 

The number of Americans filing unemployment claims dropped to a nine-month low last week, according to Labor Department data released Thursday. That’s an indicator that the economy is still growing amid the highly publicized job reductions.

The persistent shortfall of workers means that those who are laid off can typically find employment elsewhere, and quickly. 

A survey from tech recruiting and staffing firm Andiamo found that 74 percent of tech workers who were laid off between September and November have already landed new jobs. Thirty percent of those fired workers jumped over to new industries such as finance and media. 

“Despite the large layoffs and firings in the tech sector over the past year, the data strongly implies that these workers with in-demand skills are quickly finding employment,” Joe Brusuelas, chief economist at auditing firm RSM, said in a note.  Fed rate hikes are making a serious dent on inflation A customer looks at refrigerated items at a Grocery Outlet store in Pleasanton, Calif.,. on Thursday, Sept. 15, 2022. (AP Photo/Terry Chea)

Federal Reserve Chairman Jerome Powell can finally exhale.

After six straight months of declines in both the consumer price index and personal consumption expenditures (PCE) price index — the two primary ways of tracking inflation — Fed officials are willing to acknowledge that their rate hikes are working.

“We actually see disinflation in the goods sector,” Powell said Wednesday, after the Fed issued its smallest interest rate hike since March 2021. 

“We note that when we say inflation is coming down that this is good,” he continued.

Powell’s remarks may seem like little more than a basic observation. But his willingness to acknowledge progress against inflation — however slight — is a sign that the Fed feels increasingly confident in its fight to bring down price growth.

The Fed has been reluctant to declare victory with the PCE price index still up 5 percent on the year in December, well above the Fed’s annual inflation target of 2 percent but down from a peak of 7 percent in June. Pence: ‘We’ve got to have a conversation’ about reforming Social Security What are spy balloons and what is their purpose?

Powell added that while prices for goods have fallen steadily, prices for basic services are still rising and may continue to do so as long as the labor market holds strong.

The staggering January gain of 517,000 jobs might be a cause for concern for the Fed, even though wage growth continued to slow down. While Fed officials are optimistic they can quash inflation without derailing the job market, they could face pressure to keep cranking up rates.

“If the central bank thinks that the low unemployment rate will necessarily push up wage growth and inflation moving forward, this strong report may darken the economic outlook. But if instead, Chair Powell and colleagues are heartened by tempering wage growth, then the odds that the economy can avoid a recession increase,” wrote Nick Bunker, head of economic research at Indeed Hiring Lab, in a Friday analysis.

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Donald Trump’s Middle East envoy pushes for Gaza ceasefire deal ahead of US inauguration

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Donald Trump's Middle East envoy pushes for Gaza ceasefire deal ahead of US inauguration

Donald Trump’s Middle East envoy has met Israel’s prime minister in an effort to secure a ceasefire deal in Gaza before the president-elect takes office on 20 January.

Benjamin Netanyahu’s office confirmed details of the meeting with Steve Witkoff on Saturday, adding that the head of the Israeli Mossad intelligence agency has been deployed to Qatar in order to “advance” talks.

It was not immediately clear when David Barnea would travel to Doha for the latest round of indirect discussions between Israel and Hamas.

Earlier on Saturday, an Israeli official said some progress had been made, mediated by Egypt, Qatar and the United States, to reach a deal in Gaza.

Israel's Chief of the Mossad David Barnea and Security Agency director Ronen Bar attend a memorial ceremony of the Hamas attack on October 7 last year that sparked the ongoing war in Gaza, at the Mount Herzl military cemetery in Jerusalem on October 27, 2024. GIL COHEN-MAGEN/Pool via REUTERS
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Ronen Bar (left), director of Israel’s security agency, and David Barnea (right), head of Mossad, at a ceremony marking the 7 October Hamas attack. File pic: Reuters

The mediators are making renewed efforts to halt fighting in Gaza and free the remaining Israeli hostages held there before Mr Trump takes office.

A deal would also involve the release of some Palestinian prisoners held in Israeli jails.

Families of Israeli hostages welcomed Mr Netanyahu’s decision to dispatch the officials, with the Hostages and Missing Families Forum Headquarters describing it as a “historic opportunity”.

Mr Witkoff arrived in Doha on Friday and met the Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, Qatar’s foreign ministry said.

Egyptian and Qatari mediators received reassurances from Mr Witkoff that the US would continue to work towards a fair deal to end the war soon, Egyptian security sources said, though no further details were released.

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Israel launched its assault on Gaza after Hamas fighters stormed across its borders in October 2023, killing 1,200 people and taking more than 250 hostages, according to Israeli figures.

Families of the roughly 100 hostages still held in Gaza are pressing Mr Netanyahu to reach a deal to bring their loved ones home.

Since then, more than 46,000 people have been killed in Gaza, according to Palestinian health officials, with much of the area destroyed and gripped by a humanitarian crisis, with most of its population displaced.

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Pope Francis honoured by Joe Biden with Presidential Medal of Freedom with Distinction

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Pope Francis honoured by Joe Biden with Presidential Medal of Freedom with Distinction

Pope Francis has been honoured with America’s highest civilian award by President Joe Biden, who has described the pontiff as “a light of faith, hope, and love that shines brightly across the world”.

It is the first time Mr Biden, 82, has given the Presidential Medal of Freedom with Distinction during his four years in office.

In a statement, the White House said the award is “presented to individuals who have made exemplary contributions to the prosperity, values, or security of the United States, world peace, or other significant societal, public or private endeavours”.

Mr Biden had been scheduled to present the medal to Pope Francis, 88, in person on Saturday in Rome on what was to be the final overseas trip of his presidency. But the president cancelled his visit to monitor the California wildfires.

The White House said Mr Biden bestowed the award during a phone call in which they also discussed efforts to promote peace and alleviate suffering around the world.

President Joe Biden presents Bono with the Presidential Medal of Freedom. Pic: AP
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President Joe Biden presented Bono with the Presidential Medal of Freedom. Pic: AP

President Joe Biden presents the Presidential Medal of Freedom to Denzel Washington. Pic: AP
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Denzel Washington was also recognised. Pic: AP

President Joe Biden presents the Presidential Medal of Freedom to Michael J Fox. Pic: AP
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Michael J Fox was bestowed with the honour. Pic: AP

The award can be presented with or without distinction.

Mr Biden presented the medal of freedom – without distinction – on 5 January to several people including fellow Democrat Hillary Clinton, humanitarian and U2 singer Bono, fashion designer Ralph Lauren and actors Michael J Fox and Denzel Washington.

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Mr Biden himself is a recipient of the award with distinction, recognised when he was vice president by then president Barack Obama in a surprise ceremony eight years ago.

President Barack Obama presents Vice President Joe Biden with the Presidential Medal of Freedom during a ceremony in the State Dining Room of the White House in Washington, Jan. 12, 2017. (AP Photo/Susan Walsh)
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Barack Obama presented Joe Biden with the Presidential Medal of Freedom with Distinction in 2017. File pic: AP

The citation for the pope’s honour said his “mission of serving the poor has never ceased”.

“A loving pastor, he joyfully answers children’s questions about God. A challenging teacher, he commands us to fight for peace and protect the planet. A welcoming leader, he reaches out to different faiths,” it added.

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As the AfD elects its chancellor candidate, the far-right party looms large over German politics

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As the AfD elects its chancellor candidate, the far-right party looms large over German politics

And so now it is certain. Alice Weidel will lead her far-right party into Germany’s general election next month.

She was overwhelmingly backed at the Alternative for Germany (AfD) conference and was greeted with a standing ovation.

Weidel will fight the election with a manifesto that follows a familiar pattern from other successful populist campaigns in Europe and beyond – contempt for mainstream politicians, anger over levels of irregular immigration, a desire to rein in the power of the European Union and dismay over the spread of so-called woke values.

Alice Weidel looks on after she was elected as top candidate for chancellor of the AfD.
Pic: Reuters/Matthias Rietschel
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Alice Weidel looks on after she was elected as top candidate for chancellor of the AfD.
Pic: Reuters/Matthias Rietschel

A participant at the AfD national party conference.
Pic: AP/Sebastian Kahnert/picture-alliance/dpa
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A participant at the AfD national party conference.
Pic: AP/Sebastian Kahnert/picture-alliance/dpa

“Thank you for your trust,” she told the audience.

“I am excited to lead our campaign. For our people, for our future.”

Who is Weidel?

Weidel is an unusual figure to lead a German hard right-wing party – a gay woman with a PhD in economics, a Sri Lankan partner, two children and a home in another country – she commutes from Switzerland.

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Admittedly there is an awkward history – her grandfather was a Nazi judge appointed to the job personally by Adolf Hitler, but she has maintained that she did not know that fact growing up and has angrily distanced herself from accusations of racism.

Indeed, Ms Weidel maintains that her party is not on the far right, but is simply conservative.

Pic: AP/Sebastian Kahnert/picture-alliance/dpa/
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Pic: AP/Sebastian Kahnert/picture-alliance/dpa/

And that is part of her attraction – she is perceived as uncompromising on the things that the AfD’s supporters hold dear – migration, Euroscepticism, the greatness of German culture – but she’s also perceived as more palatable to the wider public.

Or, at least, that’s the idea.

Thousands of protesters

Outside the sports centre, where the AfD’s convention was being held, thousands of protesters gathered to raise their fears that the country was going back to the politics of the past.

“They are fascists,” said a man called Gabriel, who was helping to blockade the road that ran past the venue.

“I don’t know if we have learnt anything in the past hundred years but now we do have to stand against fascism.”

Protestors against the AfD during their national conference.
Pic: AP/Jan Woitas/picture-alliance/dpa/
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Protesters against the AfD during their national conference.
Pic: AP/Jan Woitas/picture-alliance/dpa/

Many of the delegates would angrily decry that label.

However, there was a rousing reception for Bjorn Hocke, a long-standing AfD politician who is from the right wing of this right-wing party.

His grouping, Der Flugel, was declared a suspected extremist organisation but he remained the party’s leader in Thuringia.

In 2019, a court ruled that it was not libellous to refer to Hocke as a fascist.

He has twice been found guilty of using Nazi slogans but last year, under his leadership, the AfD won the state election.

Emotions often run high when the AfD is involved. The protests here were, at times, heated.

Police officers during the protest that blocked a road near the venue for the AfD party congress.
Pic: Reuters/Thilo Schmuelgen
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Police officers during the protest that blocked a road near the venue for the AfD party congress.
Pic: Reuters/Thilo Schmuelgen

Police had to clear the road in front of Ms Weidel’s car as some protesters sat down and others began to surround it.

Later, the party’s MPs were called to gather together for a sudden security briefing.

The sports centre where this meeting was held once hosted the World Sumo Wrestling Championship.

Here, the heavyweights were political, and the prize at stake was far more consequential.

Barring a quite astonishing movement in the polls, the AfD is unlikely to win the election next month, but the party may well come second with more than 20% of the vote.

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That probably won’t equate to power – Germany’s major parties have all said they won’t go into coalition with the AfD – but it will mean momentum.

It will mean a loud voice in the Bundestag, the German federal parliament, and the ability to pressure the next chancellor into reflecting the opinions of the millions who vote for Ms Weidel’s vision.

Long term, if Ms Weidel can prove that her party is palatable, as well as popular, then she knows the political dam will one day break.

If enough people back the AfD, it will eventually become impossible to shun the party forever.

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