JANUARY 22, 2024 – US LABOR MARKET CONTINUES TO SHOW STRENGTH
The Labor Department reported the number of people applying for unemployment benefits fell to its lowest level in more than a year, reinforcing the resilient labor market despite high interest rates that are in place to cool inflation.
Jobless applications fell to 187,000 for the week ended January 16, down 16,000 from the previous week, and the fewest since September 2022. The four-week average was the lowest it has been in nearly a year. The unemployment rate has held below 4 percent for 23 straight months despite 11 increases in the Federal Funds rates since March 2022. Inflation has been decelerating, and that combined with the continuing strength in the labor market, is reinforcing hopes for a soft landing for the economy.
The Fed will next meet on January 30-31 when they are not expected to change interest rates, instead they are choosing to track the data for another two months. The next regularly scheduled meeting is March 19-20 when some economists are hoping for the first 0.25 percent rate reduction, though most do not expect rates to move before the second half of this year.