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Unemployment

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The economy shrank in the first half of this year, underscoring fears of a broad-based slowdown that could lead to a recession. At the same time, the number of people seeking unemployment benefits fell to a five-month low. Inflation, meantime, remains near its highest level in four decades, though gas costs and other prices have eased in recent weeks. Six months of economic contraction is a long-held informal definition of a recession. Yet nothing is simple in a post-pandemic economy in which growth is negative but the job market strong. The wide range of data is key in helping define when a recession hits.

Illinois' governor says the state’s relatively low jobless rate will help him keep his promise to eliminate debt in the state fund that pays unemployment benefits. Gov. J.B. Pritzker announced Tuesday that he'll transfer $450 million from the Unemployment Insurance Trust Fund to pay down the federal loan. The loan was necessary when COVID-19 shut down businesses in 2020 and unemployment soared. New jobs and decreasing unemployment has eased pressure on the fund. The debt stands at $1.8 billion and Pritzker promises to eliminate it by year's end.

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The Federal Reserve will have to keep boosting its benchmark interest rate to a point that raises unemployment and gets inflation down from unusually high levels. That's according to two central bank officials in separate remarks Monday. The comments from both officials added to an ongoing debate about how badly the Federal Reserve’s rate hikes — the fastest in more than 40 years — will hurt the economy. By lifting its benchmark rate, the Fed is pushing up the cost of a wide range of consumer and business loans, including for mortgages, auto loans, and credit cards.

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The Federal Reserve delivered its bluntest reckoning Wednesday of what it will take to finally tame painfully high inflation: Slower growth, higher unemployment and potentially a recession. Speaking at a news conference, Chair Jerome Powell acknowledged what many economists have been saying for months: That the Fed’s goal of engineering a “soft landing” — in which it would manage to slow growth enough to curb inflation but not so much as to trigger a recession — looks increasingly unlikely. “The chances of a soft landing,” Powell said, “are likely to diminish” as the Fed steadily raises borrowing costs to slow the worst inflation in four decades.

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The Federal Reserve sent a sobering message after it announced its latest big interest rate hike: It plans to keep raising rates as long as it takes to conquer the worst inflation bout in decades — even at the risk of causing a recession in the process. Its aggressive pace of rate hikes will increasingly make borrowing and spending costly for consumers and businesses. Job cuts and rising unemployment could follow. And eventually, as the job market steadily weakens along with the economy, a recession could follow. Given the strength of the job market, most economists say a recession seems months away, at least. But most of them nevertheless think an economic downturn is inevitable.

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Intensifying its fight against high inflation, the Federal Reserve raised its key interest rate by a substantial three-quarters of a point for a third straight time and signaled more large rate hikes to come — an aggressive pace that will heighten the risk of an eventual recession. The Fed’s move boosted its benchmark short-term rate, which affects many consumer and business loans, to a range of 3% to 3.25%, the highest level since early 2008. The officials also forecast that they will further raise their benchmark rate to roughly 4.4% by year’s end, a full percentage point higher than they had forecast as recently as June.

The last time the Federal Reserve faced inflation as high as it is now, in the early 1980s, it jacked up interest rates to double-digit levels — and in the process caused a deep recession and sharply higher unemployment.

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Thousands of Indians have rallied under key opposition Congress party leader Rahul Gandhi, who made a scathing attack on Prime Minister Narendra Modi’s government over soaring unemployment and rising food and fuel prices. Gandhi accused Modi of pursuing policies benefitting big business groups at the expense of small and medium industries and poor farmers and workers. He also said the government was creating an atmosphere of fear and hatred, in reference to Hindu-Muslim tensions. He said the prices of petrol, diesel, cooking gas and essential food items like wheat have shot up 40%-175% since Modi came to power eight years ago. The government says it has provided millions of people with toilets, gas connections, drinking water, bank accounts, free health insurance and homes.

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America’s employers added a healthy number of jobs last month, yet slowed their hiring enough to potentially help the Federal Reserve in its fight to reduce raging inflation. The economy gained 315,000 jobs in August, a still-solid figure that pointed to an economy that remains resilient despite rising interest rates, high inflation and sluggish consumer spending. Friday’s report from the government also showed that the unemployment rate rose to 3.7%, up from a half-century low of 3.5%. Yet that increase was also an encouraging sign: It reflected a long-awaited rise in the number of Americans who came off the sidelines and started looking for work.

A decade ago, Florida’s Space Coast was in the doldrums. The space shuttle program had ended, and with it the steady stream of space enthusiasts who filled the area’s restaurants and hotel and motel rooms during regular astronaut launches. The Kennedy Space Center’s 7,400 laid-off shuttle workers struggled to find jobs in their fields, and many left for other states. Nowadays, the county’s unemployment rate is under 3%, and the Space Coast is humming with jobs and space launches. NASA’s first launch of its new moon rocket set for Saturday was expecting to attract hundreds of thousands of visitors.

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