According to the Labor Department, jobless claims exceeded expectations, reaching 198,000. The job market remains tight, and it is expected to deteriorate further in 2023, with widespread job layoffs. However, there are some signs of improvement as the fears of a regional banking crisis have eased, leading to a slight rebound in the market. Nevertheless, caution is advised, as the FED is signaling that interest rates will continue to rise until inflation is under control.
Although the job market is still strong, with two job openings available for every person and the revised GDP for the fourth quarter was 2.6% annualized, suggesting that the economy is not weak enough for the FED to cease raising rates over the next year. The street expects the FED to push the unemployment rate over 4.5% from the 3.6%, indicating that continued market weakness is likely. A 4.5% rate will mean another 500k unemployed before end of year. Therefore, investing cautiously and in quality is recommended.
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