The labor market’s weakness is mirrored in broader economic forecasts, with the Atlanta Fed cutting Q1 2025 GDP growth projections from 3.9% to 2.9% in just a week. This follows a weaker-than-expected Q4 2024 GDP reading of 2.3%, marking a slowdown from 3.1% in Q3.
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The GDP revision reflects worsening economic conditions, including slower job growth, declining business investment, and weakening manufacturing orders. Rising unemployment claims also suggest that consumers and businesses are tightening spending, signaling that the economy’s post-pandemic momentum is fading. If this trend persists, recession risks will escalate, particularly as the Federal Reserve maintains a restrictive policy stance to combat inflation.

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