Jobless Claims Fall Again
The United States Federal Reserve has been on track to stunt decades-high inflation, claiming this attempt will not come without pain or economic suffering. However, the recently released jobless claims report says otherwise. The report had shown a drop to 193,000 Americans, which is not only below the estimate of 215,000 but is also a new five-month low. For new investors, the jobless claims report is a weekly statistic released by the U.S. Department of Labor that will count the number of people filing for unemployment.
So exactly why are jobless claims going down if the Fed is performing actions to slow economic growth and activity? Well, it all can go back to the Covid-19 pandemic and the continuingly large staffing shortages company wrestle with. Economists claim that the pain several corporations endured in staffing, whether it be shortages, high recruitment costs, or high employee turnover, may be making them more hesitant to conduct mass layoffs. They may not want to lose to the staff they’ve worked so hard to recruit and retain in the past two years, and this is something investors may be weary of; although other economic indicators have pointed to the Fed’s high-interest rates as successfully slowing down the economy, markets will be worried that low unemployment or jobless claims may force the Fed to take tighter measures to ensure they can bring inflation down to their target 2%.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
