U.S consumer sentiment rose to the highest level in 14 months in September, as household's economic outlook brightened. The Thomson Reuters/University of Michigan preliminary consumer sentiment index increased to 84.6, the highest gauge since July 2013, from 82.5 the month before. Ongoing improvement in the labor market, gains in stock portfolios and a drop in gasoline prices have underpinned household confidence in recent months. Meanwhile, labor market in the world's biggest economy is showing more signs of improvement, as claims for unemployment benefits in the country dropped to 280,000 for the week ended September 12, the lowest level in two months. The total number of people, who receive benefits, plunged to seven-year low of 2.43 million. The Federal Reserve, in turn, is waiting for the job market to perform even better, before they finally raise interest rates.
In the single currency area, employment and industrial production remain well below their pre-crisis levels and there is no indication that the Euro zone's recovery is set to accelerate to a pace that would quickly add large numbers of new jobs or end a long period of low inflation. Moreover, the European Central Bank has held the first round of the Targeted Long-term Operations program, which is aimed to lend extremely cheap money to Eurozone's banks. As one of the results, the ECB aims to bring down a record-high unemployment level in the Eurozone.
In Britain, following the unexpected split in vote on rates from MPC members in August, they decided to keep their opinions unchanged this month. The Bank of England's MPC voted 2-0-7 in favor of holding the main interest rate at 0.5%, while the vote for keeping asset purchases program at 375 billion pounds level was unanimous. Additionally, a total number of jobless claims in the United Kingdom decreased 37,200 last month, comparing to the forecast of a 29,700 fall. Alongside, payrolls added 74,000 to hit the 30.6 million level, but part-time jobs accounted for the vast majority of an overall rise. Unemployment rate, in turn, slipped to 6.2% or 2.02 million people in three months to July, down from 6.4% in April-June. More analysts' attention was focused on Scottish independence referendum on Thursday. Voters in Scotland have chosen to stay in the union, namely 55% of them. At the same time, Prime Minister David Cameron and his political opponents are promising more devolution powers for Scotland to take place after the referendum.
The Reserve Bank of Australia reiterated once again its pledge to keep the official cash rate on hold and it will not alter it any time soon to help the economy through a tough transition in growth. It is widely expected that a hike will not come until the second half of 2015. Nevertheless, the minutes of the RBA September board meeting show policy makers are getting more optimistic about the economic outlook. The RBA said low interest rates continue to support some sectors of the economy and encourage more risk-taking investment.