US labor market cooling; leading indicator flashes recession

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The number of Americans filing new claims for unemployment benefits increased moderately last week, suggesting the labor market was gradually slowing as the Federal Reserve’s year-long interest rate hiking campaign dampens demand. | Reuters

at current levels suggest employment growth remains strong, which should allow the U.S. central bank to raise rates next month before possibly halting its fastest monetary policy tightening cycle since the 1980s.US job growth expected to moderate but remain at brisk pace in March

The Fed’s “Beige Book” report on Wednesday described job gains as having “moderated somewhat” in early April “as several districts reported a slower pace of growth” than in recent reports. It also said contacts reported the labor market becoming less tight, noting “a small number of firms reported mass layoffs,” which were “centered at a subset of the largest companies.”

Though the report said several districts noted that banks had tightened lending standards, the impact has not yet been visible in most economic data, includingIn a separate report on Thursday, the Conference Board said its Leading Economic Index dropped 1.2 percent in March to the lowest level since November of 2020.

“Weakness is starting to spread and the LEI suggests a slowdown is ahead,” said Tim Quinlan, a senior economist at Wells Fargo in Charlotte, North Carolina. Stocks on Wall Street were trading lower. The dollar slipped against a basket of currencies. U.S. Treasury prices rose.ing market remains mired in recession. A third report from the National Association of Realtors showed existing home sales dropped 2.

 

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