Is a Fed rate cut still in the cards for December?
The labor market, while slowing, remains resilient. Initial claims – an established predictor of changes in the level of unemployment – have been trending downward. The four-week moving average of initial claims has been falling since Oct. 19, two weeks after disruptions caused by Hurricane Milton.
Since the Federal Reserve began raising interest rates in March 2022, the labor market has shed 4.6 million private-sector job openings. Nearly 30% of this decline occurred over the past year. As job opportunities contracted, labor mobility also slowed. The number of workers voluntarily leaving their jobs to seek other opportunities dropped from 4.2 million in March 2022 to 2.9 million last month. Over the same period, the unemployed population rose from 6 million to almost 7 million job seekers.
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