US weekly Initial Jobless Claims rise to 212K vs 215K expected
There were 212K Initial Jobless Claims in the week ending February 21, the US Department of Labor (DOL) reported on Thursday. This print followed 208K (revised from 206K) recorded in the previous week and came in slightly better than the market expectation of 215K.
  • Initial Jobless Claims in the US rose by 4K in the week ending February 21.
  • The US Dollar Index clings to small gains above 97.50.

There were 212K Initial Jobless Claims in the week ending February 21, the US Department of Labor (DOL) reported on Thursday. This print followed 208K (revised from 206K) recorded in the previous week and came in slightly better than the market expectation of 215K. In this period, the 4-week moving average stood at 220.25K.

"The advance number for seasonally adjusted insured unemployment during the week ending February 14 was 1,833,000, a decrease of 31,000 from the previous week's revised level," the DOL noted in its press release.

Market reaction

These figures failed to trigger a noticeable market reaction. At the time of press, the US Dollar (USD) Index was trading marginally higher on the day at 97.70.

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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