"Although claims are progressing on a lower trend, the Fed doesn't seem to be satisfied about the recent development of the labor market"
- Annalisa Piazza, an analyst at Newedge Strategy
Following Bernanke's statement the economy is not strong enough to withstand a possible withdrawal of stimulus, a report showed unemployment claims rose from a week earlier, however, less than initially was expected as two states appeared to be working through a backlog of unprocessed claims. The Labor Department said there 15,000 more Americans filing for jobless benefits in the week September 14, reaching the total of 309,000, up from 294,000 a week earlier, and below the 330,00 expected by analysts. Meanwhile, the less-volatile four-week moving average dropped to 314,750, hitting the lowest since October 2007. Furthermore, the total number of people continuing to receive unemployment benefits plunged 28,000 to 2.79 million.
If taken at face value, the latest figures hinted at a pickup in hiring during this month that might make Bernanke more comfortable about planning whether to begin winding down its stimulus programme next month. With a stable fall in unemployment claims, steady growth in payrolls and a drop in jobless rate it might be suggested that the closely-watched labour market is recovering, supporting a case of the anticipated Fed announcement in the upcoming months.
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