The U.S. unemployment rate will rise modestly from its current level under Moody’s baseline scenario. Under certain assumptions, such as 2.1% GDP growth this year, the Russian-Ukraine war continuing and violence not spreading to the rest of the Middle East, the rating agency expects unemployment to increase to 4.3% in the December to February period from the current 3.8%. These are three-month averages.
Moody’s forecast shows unemployment, high-yield spreads widening
Under Moody’s most pessimistic forecast, unemployment will jump to 8.1% by late 2024, early 2025. At the other end, its most optimist scenario shows the rate dropping to 3.1%.
Moody's expects U.S. high-yield spreads to widen under all scenarios, from the most pessimistic to the most optimistic. Moody’s predicts the spread will widen to 498 basis points under its baseline assumptions, up from 326 basis points at the end of February.
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