Americans filing for unemployment benefits has fell from a five-month high last week, indicating to labor strength that highlights the persistent drive of the economy. A tight labor market composed with signs of a strengthening economy and progressively rising inflation will most likely push the FED to hike interest rates next week.
On Thursday, as reported by news source Reuters, initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 258,000 for the week ended Dec. 3, said the Labor Department. Claims for the prior week were unrevised. It was the 92nd straight week that claims were below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was much smaller. U.S. financial markets were largely unmoved by the data as investors focused on the European Central Bank’s unexpected decision to cut its asset purchases starting in April.
Prices for U.S. government debt were trading lower, while U.S. stock index futures were higher. The U.S. dollar was stronger against a basket of currencies. The Fed’s policy-setting committee meets next Tuesday and Wednesday. Economists expect the U.S. central bank to increase borrowing costs by at least 25 basis points at that meeting. The Fed raised its benchmark overnight interest rate last December for the first time in nearly a decade.