I tend to take all economic doom-and-gloom forecasts with a grain of salt, but Bank of America pays its economists a lot of money to forecast this sort of thing correctly:
The Federal Reserve's fight to squash inflation will cause the US economy to start losing tens of thousands of jobs a month beginning early next year, Bank of America warns.The Federal Reserve’s fight to squash inflation will cause the US economy to start losing tens of thousands of jobs a month beginning early next year, Bank of America warns. https://t.co/Glhmr0GH5W
— CNN (@CNN) October 10, 2022
Although the jobs market remained surprisingly strong in September, the Fed is working hard to change that by aggressively raising interest rates to ease demand for everything from cars and homes to appliances. ...
As pressure from the Fed's war on inflation builds, nonfarm payrolls will begin shrinking early next year, translating to a loss of about 175,000 jobs a month during the first quarter, the bank said. Charts published by Bank of America suggest job losses will continue through much of 2023.
It's the fallout, you see, stemming from the sky-high inflation the Biden administration has overseen:
In a perfect world, the Fed would slow the jobs market enough to get inflation back to healthy levels, but not so much that it causes significant and persistent job losses. Bank of America doesn't think the Fed will be able to pull that off.
