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Choose Your Own Narrative, Jobless Claims Edition
400,000 Americans filed for unemployment benefits last week, more than expected.
It was the second consecutive week that initial claims were 400,000 or more.
The previous week's total was revised higher to 424,000. It was already the highest since May.
The four-week moving average rose slightly to 394,500.
While nothing to write home about (so to speak), the latest claims data was incremental evidence to support the contention that labor market frictions persist. Not exactly a revelation,
Considering that the Fed knows much of the data, directly or via proxies, before the market does, one can see why Powell is trying to stick to his guns.
UE remains high, new UE stalled, GDP undershooting, prices either easing or lifted by factors unlikely to be alleviated by Fed action, major withdrawal of fiscal stimulus about to begin, uncertain fate of future fiscal stimulus proposals, and another Covid surge is underway.
To start putting away the tools right now would seem, well, unpragmatic.
+1
Between Delta and the fact that the economy was shut down and is completely rebooting and still is in shock, none of the metrics you are seeing are “clean”.
There is a really good shot that the 3rd quarter will provide some clarity. At that point vaccination rates should be higher, Delta should be factored in, extended unemployment will be wound down, the kiddos will be back in school (fingers crossed), and we should have a pretty clear idea on whatever economic packages Congress and the President will enact. My two cents- the economy will continue to improve but there will still be some dislocations and pockets of difficulty. The pockets will be by geography, industry, and will vary by demographic groups too. Wall Street will not be satisfied with this narrative, and financial markets should see higher volatility as a result. This is a likely result overseas as well.
We see, now, top Republicans urging the unvaccinated to get the shot. It must have dawned on somebody high up in the GOP that a high number of the unvaccinated deaths are Republican and won’t be showing up to vote at the next election. Glad to see them getting the shot. About time.