Release Explanation: This report provides the number of people claiming new unemployment benefits and the number of people who are continuing to claim unemployment benefits. Both metrics are provided in weekly and in 4-week moving average form. Very important that economic forecasts are based on the labor market. Economic strength builds from the willingness/confidence of firms to hire, without a strong labor market growth is hard to achieve. Over time the Employment Data will affect all economic releases, it does however take time for labor trends to form. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than as a knee-jerk reaction to these numbers printing. Economists tend to look more at the 4-week numbers because weekly numbers can be volatile although the market reacts to the headline numbers initially.
Trade Desk Thoughts: The number of workers filing initial claims for unemployment benefits fell 8000 last week to 623,000, but the overall number of claims still remained near a 25-year high, the Labor Department said today. The 4-week moving average of continuing claims, which smoothes the data, was 607,500, an increase of 24,000 from the week before.
The insured unemployment rate was unchanged at 3.6%.
The number of workers who were continuing to claim unemployment benefits increased by 11,000 to 4,810,000, a new record high. The 4-week moving average of continuing claims was 4,745,250, an increase of 73,750 from the preceding week.
Forex Technical Reaction: S&P futures remained virtually unchanged after the report was released, with a decline of 0.9%. The dollar fell slightly to the higher-yielding euro, pound and Australian dollar immediately after the report was released, although it remained higher on the day.
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