Current:Home > StocksExpect higher unemployment and lower inflation in 2024, says Congressional Budget Office-LoTradeCoin
Expect higher unemployment and lower inflation in 2024, says Congressional Budget Office
View Date:2024-12-24 00:12:35
The Congressional Budget Office expects a softer labor market to help lower inflation in 2024.
The 2023 labor market has been strong but gradually cooling, with a November unemployment rate of 3.7%, according to the Labor Department’s latest jobs report. The CBO expects unemployment to jump to 4.4% in the fourth quarter of 2024 and remain close to that level through 2025.
A softening labor market and slower rent increases would help the Fed nearly hit its 2% inflation target, according to the report. Inflation measured by the core personal consumption expenditures (PCE) price index is expected to slow over the next two years, falling from an estimated 2.9% in 2023 to 2.1% in 2024 before jumping back up to 2.2% in 2025.
What is inflation?Why prices rise, what the rate means, and who it hurts the most.
The report comes shortly after the Federal Reserve hinted that it could be done hiking interest rates and forecasted three cuts next year amid falling inflation and a cooling economy.
Protect your assets: Best high-yield savings accounts of 2023
The latest CBO report also projects real gross domestic product growth to fall from 2.5% in 2023 to 1.5% in 2024 as consumer spending weakens. It is then expected to rebound to 2.2% in 2025 under improved financial conditions and lower interest rates.
But predicting the economy’s future is no easy task. The CBO says its projections are “highly uncertain, and many factors could lead to different outcomes.” Some of its predictions have already changed since its February report, which forecasted an unemployment rate of 5.1% by the end of this year compared with the current 3.7%.
“Compared with its February 2023 projections, CBO’s current projections exhibit weaker growth, lower unemployment, and higher interest rates in 2024 and 2025,” the report reads.
veryGood! (94489)
Related
- Justice Department sues to block UnitedHealth Group’s $3.3 billion purchase of Amedisys
- The Rock, John Cena, Undertaker bring beautiful bedlam to end of WrestleMania 40
- The Skinny Confidential Drops Sunscreen That Tightens Skin & All Products Are on Sale for 20% Off
- Boy trapped and killed after a truck crashes into river in Colorado, sheriff says
- Black and Latino families displaced from Palm Springs neighborhood reach $27M tentative settlement
- RHOC Alum Lauri Peterson's Son Josh Waring Died Amid Addiction Battle, His Sister Says
- How Amber Riley Feels About Glee Family 15 Years Later
- Mexico's president says country will break diplomatic ties with Ecuador
- Angels sign Travis d'Arnaud: Former All-Star catcher gets multiyear contract in LA
- Defending champ UConn returns to NCAA title game, beating Alabama 86-72
Ranking
- ONA Community Introduce
- Purdue's Matt Painter has been one of best coaches of his generation win or lose vs. UConn
- Why Brandi Cyrus Says Mom Tish Cyrus Is in Her Unapologetic Era
- Engine covering falls off Boeing plane, strikes wing flap during Southwest Airlines flight Denver takeoff
- Glen Powell responds to rumor that he could replace Tom Cruise in 'Mission: Impossible'
- An engine cover on a Southwest Airlines plane rips off, forcing the flight to return to Denver
- French diver Alexis Jandard slips during Paris Olympic aquatics venue opening ceremony
- Kelsea Ballerini talks honest songwriting and preparing to host the CMT Awards
Recommendation
-
Horoscopes Today, November 10, 2024
-
Boy trapped and killed after a truck crashes into river in Colorado, sheriff says
-
What is Masters Par 3 Contest? A guide to the family-friendly pre-tournament event
-
Dwayne 'The Rock' Johnson bemoans 'woke culture,' declines to endorse presidential candidate
-
What are the best financial advising companies? Help USA TODAY rank the top U.S. firms
-
When was the last total solar eclipse in the U.S.? Revisiting 2017 in maps and photos
-
Cole Brings Plenty, 1923 actor, found dead in Kansas days after being reported missing
-
What happens during a solar eclipse? Experts explain the awe-inspiring phenomena to expect on April 8