Fed Chair Jerome Powell warned that cooling inflation will 'bring some pain' to Americans in the form of layoffs, weaker pay growth, and higher borrowing costs.
at the fastest pace since the 1980s in an attempt to ease Americans' demand and slow inflation. Powell clarified in the speech that additional rate hikes are on the way, further eroding optimism for a soft landing.
A growth recession could even drive the unemployment rate sharply higher if enough companies lay off workers to bolster their balance sheets. The rate sits at 3.7%, just a hair above the five-decade low seen before the pandemic. A swift easing of labor demand could put Americans out of work at a time when firms are no longer hiring at the voracious pace they've kept up throughout the past year.
The economic expansion of the mid-'90s was similar, featuring easing inflation, below-average growth, and stubbornly high unemployment. The economic expansions that came after both growth recessions were healthy but still included some scarring from the few years prior.Employment data published Friday offered the first sign that the economy is settling into its phase of slow growth and rising unemployment.
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