The number of Americans claiming unemployment benefits increased to four-month high, dampening expectations that tomorrow’s unemployment rate may not be as positive as economists had hoped which could weigh down the ‘Greenback’.
The US Dollar Exchange Rate was trading in the region of 0.6615 against Sterling as of 14:34 pm GMT
According to the US labour department Initial claims for state unemployment benefits increased by 28,000 to a seasonally adjusted 385,000, the highest level since last November. Today’s data marks the third straight week of claims gains and beat economist expectations of a fall of just 350,000.
The data covers a week that included Good Friday on March 29th before the Easter holiday, which was earlier than the last four years. Claims for the Virgin Islands and California were estimated. The Easter holiday falls on different weeks from year to year, making it a challenge to smooth out swings in the data, a Labour Department spokesman said as the numbers were released. Further progress in the labour market that includes a pickup in the pace of hiring depends on faster economic growth.
Some economists have dismissed the notion that the latest figures could lead to disappointment tomorrow with Brian Jones a senior US economist at Societe Generale saying; “We have seasonal adjustment quirks, next week we expect claims to come right back down. The labour market is okay, its fine.”
Others such as Tim Ghriskey, chief investment officer at Solaris Group said; “It does look like we’ve seen some stalling in job creation, or at least a stalling in the lowering of claims.”
Tomorrow’s Non-farm payrolls data is expected to show that employers have added 200,000 jobs to their payrolls last month, a slowdown from Februarys figure of 236,000.
If the data comes in worse than expected then we can expect to see the US Dollar weaken.
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