The Department of Labor has reported new initial jobless claims for the week ending August 24th. The figure came in at 231,000, down slightly from the 233,000 reported the week prior. Last week, there was a revision to the employment data showing that 818,000 fewer jobs were created than initially thought for the 12 months ending in March 2024.
David Miller, Catalyst Funds co-founder, CIO, and senior portfolio manager joins the show to discuss the data and how investors should be interpreting the data as the Federal Reserve moves toward its first interest rate cut.
"I think they’re reasonably accurate," Miller says of the jobs data, adding, "We’re in a pretty healthy economy."
While some economists cast some doubt on the figures due to increased labor supply from immigration, he explains, "You’re definitely adding to the supply, but there was always plenty of demand, especially for lower-income labor, which a lot of Americans who have been here for a long time aren’t willing to do for lower rates. So I think it’s pretty healthy for the economy. I think it’s contributing to GDP growth."
Despite his view of the economy as "healthy," Miller expects weak GDP growth in the fourth quarter because of the "lagging effects of higher interest rates." He expects the Federal Reserve to start cutting rates in September. Once rates start to fall, he expects 2%-3% GDP growth with about 2% inflation.
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