Job Market Strength Keeps Fed's Rate Cuts in Check

Applications for unemployment benefits in the U.S. fell to their lowest in eight months, highlighting a stable job market. This aligns with the Federal Reserve's forecast of fewer interest rate cuts in 2024, despite continued economic challenges like service inflation.

The latest data from the Labor Department indicates a drop in the number of Americans applying for unemployment benefits, reaching an eight-month low. This suggests a robust job market, corroborating the Federal Reserve's prediction of fewer interest rate cuts this year.

Initial unemployment claims fell by 9,000 to a seasonally adjusted 211,000 for the week ending December 28, the lowest since April. This decline outpaced economist expectations of 222,000 claims. Notable decreases were seen in California and Texas, while significant increases were recorded in Michigan and other states.

Reports indicate continued elevation in unemployment claims, partly attributed to seasonal data fluctuations. December's upcoming employment report is eagerly awaited; it's set against a backdrop of stable yet cautious job hiring following the post-pandemic recovery.

(With inputs from agencies.)