High interest rate shock has not appeared yet, the US labor market is "against the wind"

On August 24, the US Department of Labor said that the number of initial unemployment claims in the country decreased by 10,000 applications, to only 230,000 applications within 7 days (as of August 19), the lowest level in three weeks.

US jobless claims fall to three-week low. (Source: Getty Images)

This is also the second consecutive week of decline, in the context of the US labor market remaining "tight", despite interest rates continuously rising at high levels.

The number of new claims for unemployment benefits last week was revised up by 1,000, according to the US Department of Labor. This figure is still lower than the forecast of 240,000 claims - the level that economists gave in a recent survey conducted by the UK news agency Reuters .

Since March 2022, when the US Federal Reserve (Fed) raised interest rates for the first time, economists predicted a recession in the labor market.

However, the predicted “shock” has yet to appear and the labor market of the world’s largest power continues to “go against the wind”, as businesses continue to recruit more employees to ensure production activities quickly return to orbit after the Covid-19 pandemic.

A strong labor market and slowing inflation are bolstering optimism that the US economy can avoid recession.

Bloomberg (USA) commented that the latest report on the number of US unemployment benefit applications "shows that the labor market remains strong and is supporting new momentum for the economy".

The economy grew at a 2.4% annual rate, beating expectations that growth would slow as interest rates rose sharply, according to government data. The combination of slowing inflation and a relatively strong job market has led many economists to revise down their GDP growth forecasts for the rest of this year and through 2024.

Source: https://baoquocte.vn/cu-soc-lai-suat-cao-chua-xuat-hien-thi-truong-lao-dong-my-nguoc-gio-239620.html