05/16/2024

The U.S. Labor Market is Rebalancing

The economy is slowing further

The number of Americans filing new claims for jobless benefits fell last week, unwinding nearly half of the jump at the start of the month, consistent with a gradually cooling labor market.

Other data on Thursday suggested the economy lost further momentum early in the second quarter as the delayed effects of the Federal Reserve's hefty interest rate hikes start to have a bigger impact. Single-family homebuilding fell for the second straight month in April and permits for future construction hit an eight-month low. Output at factories unexpectedly fell.

"The economy is losing momentum in the face of restrictive monetary policy," said Sal Guatieri, a senior economist at BMO Capital Markets.

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