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The number of Americans filing for initial unemployment benefits unexpectedly rose last week, indicating a potential slowdown in the labor market’s momentum.
Initial jobless claims reached 242,000 for the week ending June 8th, surpassing the consensus forecast of 225,000 and exceeding the previous week’s total of 229,000. The four-week moving average also ticked upwards, reflecting a slight cooling trend.
This data comes on the heels of a surprisingly robust May jobs report, where nonfarm payrolls grew by 272,000 jobs, significantly exceeding expectations.
The U.S. Federal Reserve, which had been contemplating interest rate cuts, responded to the May jobs report by scaling back its projected rate reductions for the year. After maintaining interest rates at its latest meeting, the central bank now anticipates only one rate cut in 2024, down from the previously projected three.
While the labor market had shown signs of cooling earlier in the year, the recent uptick in jobless claims and the May jobs report suggest a more complex picture. The Federal Reserve will likely continue to closely monitor these labor market indicators as it navigates its monetary policy decisions in the coming months.
