KPMG Chief Economist Diane Swonk reacts to the surprising January jobs report and discusses the impact of the Fed’s next interest rate cut on ‘how you make money’.
Number of Americans applying unemployment allowance Stocks rose more than expected last week as high-profile companies continued to announce large-scale layoffs.
announced numbers Thursday The Labor Department said new claims rose by 13,000 to 215,000 in the week ending February 24, beating the 210,000 forecast by economists polled by Refinitiv. However, this is slightly lower than the pre-pandemic 2019 average of 218,000 claims.
The number of continuing claims filed by Americans who continue to receive unemployment benefits reached 1.9 million in the week ending February 17, an increase of 45,000 from the previous week and the highest level since November. became.
The number of well-paying jobs is decreasing
Job seekers attend the Veterans Employment and Resources Fair on January 9, 2024 in Long Beach, California. (Photographer: Eric Thayer/Bloomberg via Getty Images/Getty Images)
The labor market has remained historically tight over the past year, contrary to economists’ predictions of an economic slowdown. Economists expect the labor market to continue slowing in the coming months as higher interest rates trickle through the economy.
of federal reserve The government has raised interest rates 11 times since March 2022 with the aim of curbing inflation and cooling the labor market. Policymakers have suggested that rapid wage growth, a product of a strong labor market, is contributing to the inflationary crisis that has ravaged the wallets of millions of Americans over the past few years.
Americans in these states will get a pay raise this year
There are increasing signs that the labor market is starting to weaken in the face of rising interest rates and stubborn inflation.
An Amazon Prime delivery worker sorts packages in a van in Queens, New York. (Lindsay Nicholson/UCG/Universal Images Group via Getty Images/Getty Images)
had. Significant wave of layoffs Since the beginning of the new year, the list has been growing longer by the day. Alphabet, Amazon, American Airlines, Citigroup, Snap, and UPS are among the major companies cutting jobs.
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Still, job growth unexpectedly surged early in the year as employers added a surprising number of jobs. 353,000 new jobs. The unemployment rate also remained unchanged at 3.7%. The surprisingly strong report highlighted how the job market remains largely intact despite rising interest rates, while also reducing the likelihood of an imminent rate cut.
The Department of Labor will release February employment statistics on March 8 at 8:30 a.m. ET.
