|

US: Initial Jobless Claims rose a tad to 218K last week

  • Initial Jobless Claims increased to 218K vs. the previous week.
  • Continuing Jobless Claims stayed the same at 1.946M.

According to a report from the US Department of Labour (DOL) released on Thursday, the number of US citizens submitting new applications for unemployment insurance increased to 218K for the week ending July 26. The latest print fell short of initial estimates (224K), while last week’s prints stood at 217K.

The report indicated a seasonally adjusted insured unemployment rate of 1.3%. Additionally, the four-week moving average decreased by 3.5K, bringing it down to 221.0K from the unrevised average of the previous week.

Moreover, Continuing Jobless Claims remained at 1.946M for the week ending July 19 after being revised down by 9K.

Market reaction

The Greenback alternates gains with losses in the wake of the releases of weekly claims and inflation tracked by the PCE, motivating the US Dollar Index (DXY) to hover around the 99.80 zone, close to recent peaks.

Employment FAQs

Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.

The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.

The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.

Author

Pablo Piovano

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

More from Pablo Piovano
Share:

Editor's Picks

GBP/USD edges higher despite delaying BoE rate hike expectations

GBP/USD inches higher after two days of losses, trading around 1.3600 during the Asian hours. However, the British Pound may encounter headwinds as recent declines in Brent crude oil prices ease immediate inflation concerns. This shift has led money markets to push back expectations for the Bank of England's next interest rate hike from late 2026 into early 2027.

EUR/USD gains on hawkish ECB policy outlook

EUR/USD edges higher after registering minor gains in the previous day, trading around 1.1650 during the Asian hours. The pair gains ground, bolstered by the European Central Bank’s hawkish monetary policy outlook.

Gold resumes profit-taking pullback before Warsh’s Jackson Hole speech
Gold is back in the red below $4,600 early Friday, resuming its corrective decline from 15-week highs of $4,697 earlier this week. Gold bulls are consolidating the upside, awaiting Federal Reserve (Fed) Chairman Kevin Warsh’s debut at the annual Jackson Hole Symposium.
Pi holds steady as Core Team focuses on distributed AI infrastructure
Pi Network (PI) price hovers above $0.0900 on Friday, sustaining the mild 3% gains recorded over the last two days. Pi Core Team announced the launch of new SoloHost apps, OpenClaw and Atlassian MCP Server, on Thursday, in hopes of expanding the Pi ecosystem. PI token must reclaim the $0.1000 psychological threshold for a sustained recovery.
Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September. The Jackson Hole symposium, held from August 27 to 29, has the official theme “Financial Innovation: Implications for Payments and Policy.”

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.