https://sputnikglobe.com/20240815/us-labor-puzzle-grows-as-jobless-claims-dip-again-from-year-high-1119782024.html
US Labor Puzzle Grows as Jobless Claims Dip Again From Year-High
US Labor Puzzle Grows as Jobless Claims Dip Again From Year-High
Sputnik International
Weekly jobless claims filed by Americans have fallen a second week in a row after reaching one-year highs, US Labor Department data showed on Thursday, adding to the puzzle over the US employment situation as being a key to a potential interest rate change.
2024-08-15T15:33+0000
2024-08-15T15:33+0000
2024-08-15T15:33+0000
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The Federal Reserve is watching multiple economic data to decide whether it should embark on the first US interest rate cut in four years after the 2020 COVID-19 outbreak. Weekly filings for unemployment insurance would be one important number. Labor Department records for the week that ended on August 10 showed initial jobless claims at 229,000, prior to any revision. The Labor Department said on Wednesday that filings during the previous week to August 3 were little changed at 234,000, versus the 233,000 it reported initially. Prior to that, the Labor Department said jobless claims hit a one-year high of 250,000 during the week that ended on July 27. Economists say the decline in filings since the spike two weeks ago is likely to make the Fed think about the job market. The US central bank’s main reason for lowering interest rates would be to acknowledge less inflation pressure from a slackening job market and economy. But if employment is picking up again, it could keep inflation where it is, discounting the need for a rate intervention. Following that, the Fed hiked rates by 525 basis, or a 5.25 percentage points, between March 2022 and June 2023 to bring rates to a two-decade high of between 5.25% and 5.5%. The central bank will decide on September 18 on whether a pivot in rates will be needed. Most Wall Street economists argue that a cut is certainly warranted with inflation crashing over the past two years from COVID-era highs. Inflation, as measured by the Consumer Price Index, grew by 2.9% in the year to July, versus its four-decade high of 9.1% in June 2022. But it remains above the Fed’s annual inflation target of 2%.
https://sputnikglobe.com/20240712/bidens-boast-on-inflation-crashes-burns-as-department-of-labor-releases-prices-report-1119354709.html
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US Labor Puzzle Grows as Jobless Claims Dip Again From Year-High
WASHINGTON (Sputnik) - Weekly jobless claims filed by Americans have fallen a second week in a row after reaching one-year highs, US Labor Department data showed on Thursday, adding to the puzzle over the US employment situation as being a key to a potential interest rate change.
The
Federal Reserve is watching multiple economic data to decide whether it should embark on the first US interest rate cut in four years after the 2020 COVID-19 outbreak. Weekly filings for unemployment insurance would be one important number.
Labor Department records for the week that ended on August 10 showed initial jobless claims at 229,000, prior to any revision. The Labor Department said on Wednesday that filings during the previous week to August 3 were little changed at 234,000, versus the 233,000 it reported initially.
Prior to that, the Labor Department said jobless claims hit a one-year high of 250,000 during the week that ended on July 27.
Economists say the decline in filings since the spike two weeks ago is likely to make the Fed think about the job market.
The US central bank’s main reason for lowering interest rates would be to acknowledge less
inflation pressure from a slackening job market and economy. But if employment is picking up again, it could keep inflation where it is, discounting the need for a rate intervention.
"The [jobless] data bears watching for signals about a more material weakening in the labor market going forward, which would have implications for [Fed] policy," Carl Weinberg, chief economist at High Frequency Economics, said in comments carried by MarketWatch. "Right now, they signal modest economic slowing at worst, not contraction. There is no call for emergency or massive Fed rate cuts in today’s outcome."
The last time the Fed did a rate cut was in March 2020, when it instituted a 100 basis-point, or full percentage point, reduction to bring US rates to an all-time low of between zero and 0.25% as the economy began to grapple with the COVID-19 outbreak.
Following that, the Fed hiked rates by 525 basis, or a 5.25 percentage points, between March 2022 and June 2023 to bring rates to a two-decade high of between 5.25% and 5.5%.
The central bank will decide on September 18 on whether a pivot in rates will be needed. Most Wall Street economists argue that a cut is certainly warranted with inflation crashing over the past two years from COVID-era highs.
Inflation, as measured by the Consumer Price Index, grew by 2.9% in the year to July, versus its four-decade high of 9.1% in June 2022. But it remains above the Fed’s annual inflation target of 2%.
