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U.S. Labor Market Remains Resilient

Q4 2022 experienced higher inflation

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to a persistently tight labor market, and further fueling fears that the Federal Reserve could raise interest rates higher than anticipated.

Those worries were amplified by other data on Thursday showing inflation was much stronger than initially thought in the fourth quarter, which raises the risk of higher readings when the government publishes January's personal consumption expenditures (PCE) price data on Friday.

While the Fed is expected to deliver two additional rate hikes of 25 basis points in March and May, financial markets are betting on another increase in June. The U.S. central bank has raised its policy rate by 450 basis points since last March from near zero to a 4.50 percent-4.75 percent range.

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