Risk Sentiment Improves As Claims Show Stable Jobs Market
Today we finally got some good news from the US jobs market in the form of initial jobless claims falling back to 233K from 250K last week.
Today we finally got some good news from the US jobs market in the form of initial jobless claims falling back to 233K from 250K last week which is a sizeable decrease, but not by much much, however it has calmed some nerves and risk sentiment is better. Stock markets and the USD are higher.
Focus on Unemployment Claims and Employment Indicators
Following a spike in unemployment claims last week, today’s attention shifted to the latest initial claims data and the broader slowdown in employment indicators, including the Non-Farm Payrolls (NFP). The surge in claims last week reached its highest level in a year, raising questions about whether this was due to Hurricane Beryl’s impact or an underlying slowdown in the job market.
Assessing the US Economic Impact from Jobs
If the spike in claims was primarily hurricane-related, we might see a correction this week, which would suggest the economy is still holding up well. However, if claims remain elevated, closer to the consensus, it could signal a deeper slowdown in the labor market. The actual initial jobless claims came in at 233K, slightly below the expected drop to 240K from 249K. This figure will be closely watched to gauge the ongoing health of the job market.
Weekly Initial Jobless Claims (Week Ending August 3, 2024)
- US initial jobless claims: 233K vs. 240K expected
- Previous week: 249K (revised to 250K)
- 4-week moving average of initial claims: 240,750 vs. 238,250 last week
- Continuing claims: 1.875M vs. 1.870M expected
- Previous week continuing claims: 1.877M (revised to 1.869M)
- 4-week moving average of continuing claims: 1.862M vs. 1.855M last week
The 17,000 drop from the revised level of the previous week suggests that the jump in jobless claims was more influenced by the hurricane than by underlying weaker trend in the labor market. While the number of new claims has decreased, the rise in continuing claims indicates that some workers are taking longer to find new employment. The heightened anxiety leading up to this data release has now subsided, and with this clarity, the US dollar has surged in response.
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