Number of initial jobless claims in the USA recently lower than expected
The number of initial applications for unemployment benefits in the USA has recently been lower than expected. Last week, 209,000 citizens applied for state benefits, as the US Department of Labor announced on Wednesday. Experts surveyed by the Reuters news agency had expected 226,000, after a revised 233,000 in the previous week. The less volatile four-week average rose to 220,000. According to experts, a figure of 270,000 first-time applications is the critical mark at which a negative trend reversal on the labor market becomes apparent.
The US Federal Reserve (Fed) is combating inflation with a tight monetary policy. At the same time, it wants to cool down the hot labor market without stifling the economic engine. After some substantial interest rate hikes, the Fed has recently paused twice in a row and left the key monetary policy rate in the range of 5.25 to 5.50 percent. Although the monetary authorities are not ruling out a further increase, a rate cut for June has already been fully priced in on the futures markets in view of the slowdown in inflation.
The lower-than-expected number in initial jobless claims could be a positive sign for the US labor market. Despite this, the US Federal Reserve is still concerned about maintaining a balanced labor market in the USA, as high unemployment benefit claims might hinder their efforts to control inflation.
Source: www.ntv.de
