US labor market cooling; leading indicator flashes recession
-
Loading... - austin holly
- 24 Apr 2023
- 87 Views
- 0 Like
- 0 Comment
The number of Americans filing new claims for unemployment benefits increased moderately last week, suggesting the labor market was gradually slowing as the Federal Reserve's year-long interest rate hiking campaign dampens demand.
Though measured, the loss of labor market momentum added to slumping retail sales and manufacturing activity in heightening the risks of a recession as soon as the second half of the year. Banks have tightened lending, which could make it harder for households and small businesses to access credit. A measure of future economic activity plunged to the lowest level in nearly 2-1/2 years in March, other data showed on Thursday.
"After months and months of watching, for the first time we can say we see a recession coming and it will be a miracle if we don't have a downturn in the economy," said Christopher Rupkey, chief economist at FWDBONDS in New York.
Initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 245,000 for the week ended April 15, the Labor Department said. Economists polled by Reuters had forecast 240,000 claims for the latest week.
The combination of spring breaks and people who have exhausted their severance packages following a rush of layoffs in the technology sector and other areas of the economy sensitive to interest rates, could account for part of the rise in claims last week.
Economists also noted that the seasonal adjustment factors, the model that the government uses to strip seasonal fluctuations from the data, were less favorable last week. Read More…
