First time jobless benefits are rising. Looks like the Fed’s interest rate hikes are working as intended and throwing people out of work—what economists call “demand destruction.”
The latest data are likely to further fan fears of a recession that were already on the rise with the Federal Reserve lifting interest rates at the most rapid pace in decades to blunt inflation running at the highest levels since the 1980s. A Reuters poll released on Thursday showed economists assign a median probability of recession in the next 12 months at 40%, up from 25% in the previous month's survey.
What the latest data show is that recession and job loss are exactly what the Fed wants and intends to get. This is their plan for halting inflation—throwing workers out of work.