- Initial unemployment subsidy applications decreased to 245K compared to the previous week.
- Continuous unemployment subsidy requests fell to 1,945m.
US citizens who submitted new unemployment insurance requests fell to 245K for the week ending on June 14, according to the US Department of Labor (DOL) on Thursday. This figure coincided with the initial estimates and was below the total revised of the previous week of 250k (reviewed from 248k).
The report also highlighted a seasonally adjusted unemployment rate of 1.3%, while the four -week mobile average increased by 4,750k to 245.50k from the average revised of the previous week.
In addition, continuous applications for unemployment subsidy were reduced in 6K to reach 1,941m for the week ending on June 7.
Market reaction
The dollar resumes its decline, giving part of the strong recovery on Tuesday in the middle of lower yields in the US along the curve and a constant prudence among the market participants before the key event of the FOMC later in the day. That said, the American dollar index (DXY) failed to test the key barrier of 99.00, going back to half of the 98.00 after the publication of the data.
FAQS EMPLOYMENT
The conditions of the labor market are a key element to evaluate the health of an economy and, therefore, a key factor for the assessment of currencies. A high level of employment, or a low level of unemployment, has positive implications for consumer spending and, therefore, for economic growth, which drives the value of the local currency. On the other hand, a very adjusted labor market – a situation in which there is a shortage of workers to cover vacancies – can also have implications in inflation levels and, therefore, in monetary policy, since a low labor supply and high demand lead to higher wages.
The rhythm to which salaries grow in an economy is key to political leaders. A high salary growth means that households have more money to spend, which usually translates into increases in consumer goods. Unlike other more volatile inflation sources, such as energy prices, salary growth is considered a key component of the underlying and persistent inflation, since it is unlikely that salary increases will fall apart. Central banks around the world pay close attention to salary growth data when deciding their monetary policy.
The weight that each central bank assigns to the conditions of the labor market depends on its objectives. Some central banks have explicitly related mandates to the labor market beyond controlling inflation levels. The United States Federal Reserve (Fed), for example, has the double mandate to promote maximum employment and stable prices. Meanwhile, the only mandate of the European Central Bank (ECB) is to maintain inflation under control. Even so, and despite the mandates they have, labor market conditions are an important factor for the authorities given its importance as an indicator of the health of the economy and its direct relationship with inflation.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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