2024 Outlook: Rising Unemployment and Slowing Inflation Predicted

The Congressional Budget Office predicts that the labor market will soften in 2024, leading to higher unemployment and lower inflation. The report suggests that the unemployment rate will rise to 4.4% in the fourth quarter of 2024 and remain at that level through 2025. A softer labor market and slower rent increases are expected to help the Federal Reserve reach its 2% inflation target. The report also projects a decrease in real gross domestic product growth and hints at the possibility of lower interest rates. However, the CBO acknowledges that its projections are uncertain and subject to change.