July 9, 2021

U.S. Unemployment Claims Report Annoys the Market, What Happened?

 The number of Americans submitting new claims for unemployment benefits unexpectedly increased last week even as the labor market recorded a recovery driven by brisk economic activity and increased vaccinations. is likely to face resistance in the coming months, the Department of Labor reported on Thursday.

Initial claims for unemployment benefits were as high as 373,000 for the week ending July 3, according to a report released by the Department of Labor on Thursday.

This reading is up from the previous week which recorded a total claims of only 371,000 after being revised and last week’s reading also strayed from the survey of investors which targeted a total claims of only 350,000.

This increase in unemployment claims is a surprise as past data shows there has been a significant increase in employment. A year ago, the country recorded nearly 1.5 million new claims a week following the closure of economic sectors.

However, with the increase in more widespread vaccinations and the sharp decline in Covid-19 infection cases has led to an increase in employment.

On the other hand, the level of claims continued to decline to 3.34 million, down 145,000 from the previous week’s revised level. Although there was an increase in first -time applications, the decline in the number of continuous claims represents the lowest level for unemployed beneficiaries since March 2020. At the same time, the four -week moving average for continuous claims also decreased by 44,500.

The US dollar is still trading lower, with policymakers agreeing to continue to assess economic progress and discuss plans for changes in their asset purchases.

At the time of writing, the dollar index, which measures the strength of the greenback against six other major currencies, traded lower at 92,517.