Although the recent CPI numbers have been high for January,
the number of unemployment applications has fallen. This data
indicates that employers are not laying off as many employees despite
the rising inflation. The number of applications was 2,000 below the
projected number for January. On the other hand, only 143,000 jobs
were created in January which is almost a 50% drop from December's
numbers. Despite the drop in new jobs, the labor market is relatively healthy.
Going back to the CPI numbers for January, since we have seen
an acceleration in inflation in the recent month, many are speculating
on how the Fed is going to move forward. It was speculated that the
Fed might lower interest rates, but with the recent CPI numbers the
possibility that the Fed won't cut the rates is higher. So we might see a
continuation of the higher interest rates over the next year, as well
as possibly a lower unemployment rate which could continue to steady over
the next few months.
Sources
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