Color on Weekly Jobless Claims
The weekly jobless claims are not often the stuff that moves the foreign exchange market, but the disappointment with today’s data is noteworthy and hitting the the fx market as the foreign currencies began recovering from the profit-taking earlier today.
What makes today’s report particularly important is that it coincides with week that the non-farm payrolls survey is conducted. Not only was the weakness more than expected, but there was new of additional deterioration. There was a large increase in those getting extended/emergency compensation benefits (+208k to 5.17 mln for week ending Sept 4). The number had fallen in for a few weeks in the June-July period as legislation stalled in Congress that sought an extension. The extension that has been approved runs currently until the end of the year.
The 4-week moving average of weekly claims, however, did slip to 463k, the lowest level since the end of July. Yet there is nothing in today’s data to suggest that labor market conditions are really improving. Stabilizing, maybe, improving, not so much.
The euro and dollar-bloc continue to trade heavily today, while the Swiss franc, sterling, and yen are posting small gains against the the greenback. The tone still feels largely corrective in nature.