Thursday, August 9, 2018

Jobless Claims Unexpectedly Fell and Inflation Ticked Down, Suggesting Strong U.S. Economy Unfazed by Trade War

Applications for new unemployment benefits unexpectedly fell last week and producer prices fell, indicating that the strong U.S. economy is standing up quite well amid global trade disputes.

Initial jobless claims fell declined by 6,000 a seasonally adjusted 213,000, the Labor Department said Thursday. Economists had expected the rate to rise to 220,000.

The four-week moving average of claims, considered a more reliable measure of the labor market because it smooths out week-to-week volatility, fell to 214,250.  That is equal to the 48-year low set in May, according to Schwab’s Randy Federick.

There had been some reports of layoffs due to tariff pressure. The decline in claims, however, suggests that the U.S. labor market is very strong overall. Prior to the Trump presidency, unemployment claims have not been this low since the 1970s.


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