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US Jobless Claims Fall to New Post-Covid Lows

by Adam Corbett | November 18, 2021

The Department of Labor reported this morning that 268,000 Americans filed for unemployment for the first time last week – 1,000 lower than the prior week’s revised number. The seasonally-adjusted reading amounted 8,000 more than markets were expecting but represented the seventh straight weekly decline – and the lowest since the pandemic hit early last year.

​​​​Markets didn’t blink, and the US dollar continued to trade at session highs. For the month, the trade-weighted dollar index is up about 1.6 percent.

The four-week moving average, used to smooth out fluctuations in the data, decreased 5,750 from the previous week’s average to sit at 272,250. Continuing claims declined 129,000 from the previous week to a seasonally-adjusted 2.08 million.

The fall in claims seems to be plateauing as workers across the US remain reluctant to go back to work, still fearful of Covid variants. Business owners are struggling to fill almost 10 million jobs, with worker shortages forcing many to reduce hours or cut production cycles. Not only does this impact consumer spending, but reduced supply levels are also contributing to price increases.

The focus: Markets are patiently awaiting President Biden’s Fed nomination, which is reportedly set to be released before the Thanksgiving holidays next week. Odds briefly jumped to 40 percent on a Lael Brainard nomination but have since come down, with Jerome Powell remaining the consensus favourite. Markets view Brainard as more dovish, and should she win, are likely to price in a more accommodative monetary policy stance.

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