The US economy has gone through a rough path during the winter months. Do you recall the panic that struck the forex market and all other financial markets in February and everyone kept repeating "The end of the world is near"? This, together with the slowdown of the Chinese economy were the main reasons for that mini crash.
These mini market crashes are dangerous because they feed on fear and they generate fear as well, which makes the firms and the consumers less willing to spend. That leads to fewer sales, job cuts, less income and the world enters another crisis like the one we saw in 2008.
But, luckily the US economy has improved in the Q2 (second quarter). The service sector, the wages, the construction, home sales etc all have been performing quite well during this period. The best performing sector though remains the employment sector. The unemployment claims have been declining, the new job openings remain at elevated levels and the unemployment rate is below the 5% the natural rate.
The unemployment claims for July which were released an hour ago or so, also showed that this sector remains in great shape. The claims for unemployment benefits were smaller than expectations and the 4-week average remains at the 250k area. More and more sectors of the US economy are crossing the line into the bright side, but will they be enough to pull the other sectors and the rest of the world up? The forex traders don´t think so since the USD seems unimpressed by the news.