- Pantheon Macroeconomics
The number of people seeking US jobless aid plunged from a 14-month high during the last week, partially erasing increases of the last two weeks that had fuelled concerns about rising layoffs. According to the Labour Department, initial applications for state unemployment benefits dropped 16,000 to a seasonally adjusted 278,000 for the week ended May 14. That followed a previous jump to 294,000, which was the highest recorded level since February 2015. Such a decrease was initiated due to fewer filings in New York following the preceding weeks' jump that reflected difficulties adjusting for the spring break holiday. Meanwhile, the four-week moving average, a less volatile measure, rose to 275,500. Claims have now been below 300,000, showing the longest stretch since 1973 meaning a strong job market. A small rate of dismissals, in line with stable hiring, shows companies have confidence in the demand outlook.
The impressive bunch of firmer economic reports was released amid signs that the Federal Reserve probably could raise interest rates again. The minutes from the US central bank's for the April 26-27 policy meeting, published on Wednesday, revealed that most officials are considering raising rates in June in case data continued to point to an improvement in second-quarter growth.
© Dukascopy Bank SA