The Labor Department reported initial unemployment insurance claims for the week ending Aug. 24. The number was 231,000, down slightly from 233,000 the previous week. A revision to employment data was made last week that showed that 818,000 fewer jobs were created in the 12 months ending in March 2024 than initially thought.
David Miller, co-founder, CIO and senior portfolio manager at Catalyst Funds, joins the show to discuss the data and how investors should interpret it as the Federal Reserve heads towards its first interest rate cut.
“I think it’s pretty accurate” about the jobs data, Miller said, adding: “We have a pretty healthy economy.”
While some economists question this figure, citing increased labor supply due to immigration, he explains: “Yes, the supply has increased, but there has always been plenty of demand, especially for low-income workers. A lot of Americans who have been in the U.S. a long time don’t want to do those jobs because of the low wages. So I think this is a pretty healthy thing for the economy. I think it’s contributing to GDP growth.”
Miller believes the economy is “healthy,” but expects fourth-quarter GDP growth to be weak due to the “lagged effect of rising interest rates.” He expects the Federal Reserve to start cutting interest rates in September. Once interest rates start to fall, he expects GDP growth to be 2-3% and inflation to be around 2%.
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This post was written by Melanie Leal
