Top Economist: US Unemployment Will Rise

A top economist predicted that U.S. unemployment will rise and jeopardize the Federal Reserve’s desire to avoid a recession.

Vanguard’s Joe Davis told Bloomberg’s “What Goes Up” podcast that while a spike in unemployment will suppress wage growth and help inflation fall to the Fed’s target level of 2%, it will also ruin hopes for a “soft landing,” where inflation falls without a recession or big job losses.

Business Insider reported that most banks expect unemployment to rise above 4% in the next 12 months as the Fed’s interest-rate hikes affect the labor market.

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