Number of initial jobless claims down in the USA
The number of initial applications for unemployment benefits has fallen significantly in the USA. Last week, 202,000 Americans applied for state support, as the US Department of Labor announced on Thursday. Experts surveyed by the Reuters news agency had expected 216,000, after an upwardly revised 220,000 in the previous week.
The less volatile four-week average fell to 207,750, meaning that the critical mark of 270,000 is still very far away, indicating a negative turnaround in the labor market.
The US Federal Reserve (Fed) is fighting inflation with a high interest rate policy. At the same time, it wants to cool down the hot labor market without stalling the economic engine. After some substantial interest rate hikes, the Fed has recently paused three times in a row. The financial markets expect it to keep the key interest rate in the range of 5.25 to 5.50 percent at the end of the month. A first rate cut of a quarter of a percentage point is expected on the futures markets for March.
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The decline in initial unemployment claims could potentially lead to fewer Americans relying on unemployment benefit. As the US labor market recovers, businesses might need to increase their payrolls to meet demand.
If the US labor market continues to improve, some individuals who were previously collecting unemployment benefit might transition back into the US labor market, contributing to a reduction in unemployment rates in the USA.
Source: www.ntv.de
