The Week in Review: Housing, Stock Market, Labor Market, and the Fed

Here's a rundown of how the housing market, stock market, labor market, and the Fed are doing this week.

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The Federal Reserve's interest rate hikes have further tanked the housing and stock markets this week. However, signs that the job market may not be cooling quickly enough could mean that the economy has much more to lose before decades-high inflation subsides. This feeds concerns that a recession may only be inevitable, even if not immediate.

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There is "almost no evidence" that inflation has peaked, Minneapolis Fed President Neel Kashkari said at a Thursday conference. This is a troubling sign for the economy, as it suggests that inflationary pressures are still strong and could continue to rise in the months ahead. This could lead to higher interest rates and a slower pace of economic growth.

Key Facts

The economy is teetering on the brink of a recession, and experts are divided on whether or not it will happen. The main pillars of the economy - employment, housing, and consumer spending - are all showing signs of weakness. Employment is one of the key indicators of a healthy economy.

Housing Market: Prices Continue to Rise

The housing market is still struggling in the face of rising interest rates. Mortgage applications have plummeted to their lowest level in over two decades, according to data released by the Mortgage Bankers Association. This trend is likely to continue, putting further pressure on the already struggling housing market.

The stock market is on the rise!

With the Fed continuing to hike interest rates, stocks are likely to remain under pressure in the near term. However, the strong employment report from ADP this week suggests that the underlying economy remains healthy, which could provide support for stocks over the longer term.

The Federal Reserve: America's Central Bank

The Fed's aggressive economic tightening campaign is expected to continue this year, with rates rising by another 125 basis points. However, this is largely dependent on incoming economic data. If data shows better-than-expected inflation, this could justify smaller hikes. As it stands now, it looks almost certain that officials will raise rates by another 75 basis points in November, which would push borrowing costs to a new 15-year high.

Labor Market: Job Seekers Outnumber Open Positions

The job market has been one of the economy's sturdiest pillars this year, but signs of a potential turnaround have started emerging. Hiring intentions have fallen to their lowest level since 2011, while new jobless claims have jumped 15% to 219,000 last week. These developments suggest that the job market may not be as strong as it has been in recent months.

Further Reading: How to Summarize Input into an Engaging Headline

The jobs report may have been better than expected, but that didn't stop markets from plunging. Here's a look at why the market reaction was so negative.

The unemployment rate fell to 3.5% in September as the labor market added 263,000 jobs. This is good news for the economy and for workers who are looking for jobs.

The labor market is beginning to show signs of stress as job cuts surge. This is a worrying development, as it could signal the start of a more serious economic downturn.

The stock market is poised for bigger losses as the economy enters a "danger zone." This is according to Forbes, which cites experts who say that the market is at risk of a major correction.