by Calculated Risk on 1/01/2025 12:40:00 PM
Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2025. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I posted thoughts on those in the newsletter (others like GDP and employment will be on this blog).
I’m adding some thoughts and predictions for each question.
Here is a review of the Ten Economic Questions for 2024.
3) Unemployment Rate: The unemployment rate was at 4.2% in November, up from 3.7% in November 2023. Currently the FOMC is projecting the unemployment rate will increase to the 4.2% to 4.5% range in Q4 2025. What will the unemployment rate be in December 2025?
Note the period in the late ’60s when the unemployment rate was mostly below 4% for four consecutive years. That period ended in late 1969 with a recession.
Click on graph for larger image.
The unemployment rate is from the household survey (CPS), and the rate increased in November to 4.2%, up from 3.7% in November 2023.
Forecasting the unemployment rate includes forecasts for economic and payroll growth, and also for changes in the participation rate (previous question).
