US Unemployment Claims Data: Impact on Monetary Policy and Labor Market Strength

© Reuters.

Investing.com – The weekly US unemployment claims data is now out, which should provide further signals on the Fed’s next steps on monetary policy, as well as the strength of the labor market.

The data this time were inconsistent with the vision of the Federal Reserve, which desires a weak labor market and economy and greater unemployment to achieve a soft recession and then lower inflation, as applications for unemployment benefits were lower than experts’ expectations, which indicates that the labor market and economy are getting stronger. This motivates the Federal Reserve to continue its tight monetary policy in the coming period.

Gold prices have recovered from their losses now after the release of the data, coinciding with stability.

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Unemployment data

It recorded 207,000 applications, while expectations indicated that 210,000 applications would be registered. However, it recorded 204 thousand in last week’s reading, but this reading was revised to 205 thousand.

Thus, it recorded 208.75 thousand in 4 weeks, after recording 211.25 thousand in last week’s reading.

The weekly unemployment index provides very temporary data, quantifies the amount of individuals claiming unemployment insurance for the first time during the past week and traders view unemployment as an indicator that gives a simple indication of the future performance of the economy. A downward trend has a positive impact on a country’s currency, as workers tend to spend more money.

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Gold and dollar now

It fell 0.3% to $1,829 an ounce.

While it fell by 0.28% to $1816 per ounce.

On the other hand, the dollar index stabilizes at 106.544 points.

2023-10-05 12:32:00
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