Jobless claims fall a day after Fed hikes rates again

The number of new applications for unemployment benefits unexpectedly dropped by 1,000 to 191,000 last week, the Labor Department reported Thursday.

Despite the Federal Reserve’s to efforts to strengthen monetary policy to quick economywide spending and get down inflation, declining jobless claims are a sign that the labor market is still tenacious.

Given that the Federal Reserve has been sharply hiking, the regular number of jobless claims has received close attention over the past year. The new figures were released one day after the Fed declared it would raise its interest rate goal by 25 %.

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Due to the volatility in the financial field following Silicon Valley Bank‘s loss nearly two weeks later, the Fed made a difficult decision. However, the price increase indicates that the Fed still views prices as a greater danger than the negative effects of the banking system on the economy.

Nevertheless, Fed Chairman Jerome Powell observed on Wednesday that despite the outpouring of rate hikes over the previous year, the labor market has shown resilience. This indicates that there is some seat for the Fed’s infamous tightening.

More jobs than anticipated were added to the economy in February, and the unemployment rate increased slightly to 3.6 %, which is historically very low. Prior to that, the unemployment rate was shockingly low— 3.4 %— the lowest since 1969.

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Nevertheless, despite the robust labor market, there are worries that price increases and the current bank problems may cause the economy to enter a recession at some point in the coming year.

The likelihood of a recession in the United States was reportedly increased by Goldman Sachs to 35 %, an increase of 10 points from its earlier forecast. The forecast, according to the company,” reflects increased near-term uncertainty around the financial effects of little bank stress.”