After enduring a challenging 2022, the stock market is facing concerns of a recession despite inflation easing for the sixth consecutive month in December, with the consumer price index (CPI) rising 6.5% year-over-year and declining 0.1% sequentially. Moreover, the gross domestic product grew by 2.9% in the fourth quarter, beating analysts' expectations between 2.6% and 2.8%.
Although inflation is showing, minutes from the Fed’s December policy meeting indicate that interest rate hikes will continue until more progress is made on bringing inflation down. The Fed’s stance was backed up by the U.S. jobless claims for the week ended January 21, 2023. Jobless claims dropped to their lowest level since April 2022, indicating continued tightness in the labor market.
