Reported 9 months ago
The number of continuing unemployment benefit applications in the US reached its highest level since November 2021, signaling signs of a cooling labor market as workers struggle to find new jobs. With nearly 1.84 million claims filed in a week and a rise in the 4-week moving average, LPL Financial chief economist Jeffrey Roach sees this as a 'warning sign' of potential labor market softening. Analysts are debating whether this slowdown is a normalizing trend or a sign that higher interest rates could harm the economy, with some suggesting risks lean towards a negative outcome. Economists caution interpreting the volatile weekly claims data too deeply, but a sustained increase in claims could indicate more labor market weakness, possibly leading to Fed rate cuts. Despite the Fed's current stance on waiting for lower inflation confidence before reducing rates, some economists argue the weakening labor market trends could prompt earlier rate cuts. Investors now anticipate two Fed rate cuts this year, whereas Fed forecasts initially suggested just one cut. Analysts believe monitoring the labor market is crucial, with the potential for a further decline in job openings leading to a rise in unemployment, ultimately influencing market strategies.
Source: YAHOO