Will the unemployment rate increase or decrease in 2024 according to reports?
Though a recession was avoided in 2023, the economic results of high interest rates means the amount of jobless Americans will increase next year.
One of the worries for the United States’ economy this year has been a recession. Rising interest rates throughout the first half of the year were enforced to force companies to cut back, inevitably causing job losses. If these rates are too high then the amount of unemployed people could cause a recession by being unable to spend.
This recession was avoided but unemployment right now is at a higher level compared to this time last year. As of the latest data set, November, unemployment levels are at 3.7%.
The American economy beat the odds in 2023, coming in with far lower unemployment, far higher growth, and far better stock performance than projected.@nytopinion pic.twitter.com/03YpVRHspY
— Steven Rattner (@SteveRattner) December 28, 2023
This is lower than the 3.9% from October but lower than the 2.5% from December 2022. 3.7% represents 6.3 million people.
However, this number is expected to grow in 2024 as the effects of interest rates filter through the economy.
What could the unemployment rate be in 2024?
The Congressional Budget Office believes unemployment will reach 4.4% by the end of 2024, staying at similar levels for the year after. This would be the highets level since October 2021 during the covid-19 pandemic.
The unemployment rate in America has remained below 4% for 22 months in a row.
— President Biden (@POTUS) December 27, 2023
The modelling from the federal agency does not take into factors such as disruption caused by war. Over the last two years the global eocnomy was particularly affected by the outbreak of the Ukraine war. Other conflicts that could increase in scale, such as the Israeli bombardment of Gaza, have the potential to disrupt the US economy.