"Claims persisting below 300,000 have been historically "associated with strong payroll growth. That suggests that labour market conditions are relatively tight, which is needed to support wage growth."
- Jefferies LLC
The total number of claims for unemployment benefits in the United States dropped more than expected for the previous week ended March 21, as brightening economic outlook for the world's biggest economy is having a positive impact on job creation and decreases the number of lay-offs. In total, 282,000 Americans filed applications for jobless benefits during the weekly period, down from 291,000 a week before. Analysts, in turn, waited for completely no changes in this statistical indicator. Falling unemployment claims usually coincide with higher levels of hiring; therefore, the upcoming reports on payrolls should reveal a continuous improving situation. Employment is also one of the most important signals for the Federal Reserve to determine its monetary policy stance.
While labour market is registering positive changes for the past couple of years, with more than three million new jobs created, consumer prices in the US remain subdued. Negative impetus was also provided by oil prices in the second part of 2014. Fed's officials have stated last Wednesday that they are going to monitor situation with both labour market and inflation, before giving any guidance for an increase of the benchmark interest rate. Meanwhile, some members of the FOMC, including the St. Louis Fed President James Bullard, called for a hike as soon as possible, in order to comply with economic reality, namely the current expansion phase.
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