[Article publié jeudi 08 août 2024 à 16h04, mis à jour à 16h52] This is news that should reassure the financial markets. Unemployment claims in the United States decreased during the week of August 3, to 233,000 compared to 250,000 (revised) the previous week, the Labor Department announced this Thursday. Economists had expected an average of 240,000 registrations.
So the four-week moving average is at 240,750 versus 238,250 (revised) the previous week. The number of people receiving regular compensation rose to 1.875 million in the week of July 27 (the last week for which these figures are available) compared to 1.869 million in – a week before.
« The number of weekly jobless claims was expected to fall from 249 to 240,000, but instead the figure was slightly lower, at 233,000. », comments Florian Ielpo, head of macroeconomic research at Lombard Odier IM.
« However, the most important figure is the number of job creations released last week. However, he dominated and that spooked the markets », Remembers La Tribune, Florence Pisani, economist at Candriam.
Fears of a recession are troubling markets
Job creation increased from 179,000 in June to 114,000 in July. Meanwhile, employment figures for July showed an increase in the unemployment rate to 4.3% instead of the 4.1% expected.
« The Fed certainly wanted to slow down earnings growth (by raising its key rates to a range of 5.25% to 5.5%, Editor’s note), but the question is: did it slow down too big? » asks the expert.
A question that worried investors and, to some extent, a fall in Wall Street stock prices with the S&P 500 down almost 5% since Thursday August 1 and the technology index (Nasdaq) down almost 6% over the same time
For Peter Cardillo of Spartan Capital, the market trend last Friday and Monday was ” as there is a combination of factors, between the fear of a slowdown in the US economy and the involvement of carry trade ».
«lInvestors have adopted a “shoot first, ask questions later” (…) “, explained Sam Stovall from CFRA.
The latter were primarily based on their fear of logic ” the rule of Sahm » or « rthe rule of Sahm », designed by Claudia Sahm, former economist at the Central American Bank (Fed) and the White House. This rule establishes that the US economy is entering a recession when the last three-month average of the unemployment rate is 0.5 percentage points (50 basis points), or more, higher than the lowest level in the past twelve months. However, this rate showed 0.53 percentage points in July 2024.
New confidence this week
Not to worry, however, economists say. This mark is ” only empirical (and no) theoretical basis », remembers Florian Ielpo. For the economist, “ the enigma of Sahm’s reign remains unsolved », despite the decrease in claims for unemployment benefits published on Thursday.
Above all, “when we look in detail at the increase in the unemployment rate, 70% of it is due to temporary layoffs. But when there is a recession, companies do not temporarily lay off workers. This is a cyclical increase. So the markets overreacted.”, notes Florence Pisani who assures that she is not worried and that “the Fed is not late in lowering rates, especially since long bond rates have fallen 0.5 percentage points and they are ‘ help sustain economic activity. »
A new confidence that seems to have spread to the financial markets in the last few days since the S&P 500 opened up 1% this Thursday at 3:30 pm before climbing further to +2.10% at 4:50 pm, when the Nasdaq climbed by 2 . 24% Already on Wednesday, the New York Stock Exchange had started the session in the green, however, before it closed. On the European side, the CAC 40 showed a small fall of 0.25% to 7,247 points at 4:50 pm, just like the European stop index Euro 50 which lost 0.05%.
On the bond market, the US government’s ten-year interest rate rose to 4.00% from 3.94% on Wednesday. The dollar also recovered and advanced 0.25% against the euro, to 1.0896 dollars per euro.
« Markets may have calmed down, but this rollercoaster week isn’t over yet (and) volatility remains high », Matt Britzman’s nuance, high performance analysis of Hargreaves Lansdown.
(With agencies)
2024-08-08 14:04:00
#relief #markets #unemployment #claims #fall
