US: Initial Jobless Claims dropped to 191K last week
The number of US citizens submitting new applications for unemployment insurance went down to 191K for the week ending November 29, according to a report from the US Department of Labour (DOL) released on Thursday.
  • Initial Jobless Claims fell to 191K the week ending November 29, compared to 218K the previous week.
  • Continuing Jobless Claims dropped to 1.939M.

The number of US citizens submitting new applications for unemployment insurance went down to 191K for the week ending November 29, according to a report from the US Department of Labour (DOL) released on Thursday. The latest print came in short of initial estimates (220K) and was lower than the previous week’s 218K (revised from 216K).

Additionally, the 4-week moving average decreased by 9.5K, bringing it to 214.75K from the revised average of the previous week.

The report indicated a seasonally adjusted insured unemployment rate of 1.3%, with Continuing Jobless Claims shrinking by 4K to 1.939M for the week ending November 22.

Market reaction

The Greenback regains pace and turns positive on Thursday, revisiting the boundaries of the 99.00 hurdle in the wake of the data release when gauged by the US Dollar Index (DXY).

Employment FAQs

Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.

The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.

The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.

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