US Jobless Claims Fell Last Week

The number of Americans filing for unemployment benefits last week fell from a five-month high, suggesting sustained labor market healing that could lead to further Federal Reserve interest rate hikes next year. Initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 271,000 for the week ended Dec.12, the Labor Department said on Thursday. The prior week’s claims were unrevised.

It was the 41st straight week that claims remained below 300,000, a threshold associated with strong labor market conditions. That is the longest such run since the early 1970s.

“The labor market continues to stay tight with demand for workers strong and pockets of actual shortages in many industries. The Fed has achieved the employment part of its dual mandate and this is what triggered the rates liftoff yesterday,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

The Fed on Wednesday raised its benchmark overnight interest rate by 25 basis points to between 0.25 percent and 0.50 percent, the first hike in nearly a decade.

The U.S. central bank said in its policy statement that there had been “further improvement” in the labor market and that “underutilization of labor resources” had diminished appreciably since the beginning of the year.

U.S. stock index futures pared gains after the data on Thursday, while prices of U.S. government debt were trading higher. The dollar rose sharply against a basket of currencies.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.