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( Natural News ) Unemployment in the U.S. will rise to 5.6 percent by the end of 2023, warned Bank of America (BofA). Its prediction followed Federal Reserve officials who expressed belief that the central bank’s interest rate target will approach five percent next year.
A research note from BofA’s U.S. economics team headed by chief economist Michael Gapen stated that higher interest rates will make “a harder landing” more possible. The bank had been predicting a five percent unemployment rate for 2023, so the revised prediction amounted to a 12 percent increase.
Unemployment was at 3.7 percent in August 2022, an increase of 0.2 points from July of the same year. Prior to that month, however, the unemployment rate had consistently been at 3.6 percent for four straight months beginning March until June. (Related: Initial unemployment claims remain high as recession fears affect labor market .)
“The Fed’s actions suggest to us that it is committed to reducing inflation and it appears willing to accept some deterioration in labor market conditions,” the BofA economists stated.
The bank predicts the GDP to drop to one percent in the four quarters of 2023. The bank also believes the Fed will elevate its target […]
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