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"The issue for the market is job creation. We're not really making up what we lost during the recession."
- Scott Brown, chief economist at Raymond James & Associates Inc.
Jobless claims plunged for a third straight week, suggesting labour market is resilient to the recent government shutdown, even though, market reaction was very modest. The most traded currency pair fell from its two-year high status only because Dollar bulls took over with the Fed's stimulus taper on the horizon. Bernanke decided not to make any adjustments to the QE; however, markets reacted to the fact that the inevitable tapering will most likely come in early 2014.
A weekly report from the Labor Department usually adds some volatility into markets; however, not this time. Figures showed the number of Americans who filed applications for unemployment benefits, fell by 10,000 to 340,000 last week, down from 350,000 a week earlier, meeting analysts' expectations. The less-volatile four-week moving average, however, inched higher to 356,250, the highest since April, up from 348,250 in the prior week. The main reason for a weekly drop is that a backlog in California's reporting was cleared. The latest swing were caused by a change in computer systems in California, hence, data for the last couple of weeks do not reflect the real situation in the market. While, it is the third consecutive weekly drop in claims, bigger gains in payrolls are crucial in order to boost wages and revive consumer spending, which represents almost 70% of overall economic activity.