New data from the Department of Labor (US DOL) has become available, which has painted a rather stark picture of the US labor market. According to the weekly data, the initial jobless claims for the week rose to 219,000, while the expected number was only 200,000.
So based on the data, it seems that the initial jobless claims were 19,000 more than the expected forecast. And this is not the type of data where a higher reading is automatically assumed to be positive! When it comes to jobless claims, a lower number indicates that the labor market is healthy, while a higher number indicates that more people are losing their job in the USA!
The data also revealed that the insured unemployment rate (seasonally adjusted) was around 1%. Similarly, the 4-week MA for the relevant data was standing at 206500, which showed an increase of around 250 from the last week's data. So even based on the moving average readings, there was an increase in the jobless claims.
Experts believe that both the government and the Fed are to blame for this increase in jobless claims. On the one hand, the Fed is on an aggressive rate hike path which is slowing down the economy. Once the economy starts to slow down, it ultimately means that companies will have to slow down as well, which means they have to lay off the labor!
Another reason is the slowdown of the world economy, high inflation, and recession fears, which are hurting the sentiment of the USA economy!
For a better outlook on the health of the US labor market, the NFP report will offer a better alternative. By looking at the NFP, it will become clear how many new jobs were added or removed from the economy. Furthermore, it will also reveal the unemployment rate in the USA economy as well!
After receiving the news, the DXY retreated from its highs and was last seen at around 111.42.