No Improvement in US Labor Market

The number of applications for unemployment benefits hovered last week near the highest level of the year, showing little improvement in the U.S. labor market.

Jobless claims decreased by 6,000 to 386,000 in the week ended June 23, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The prior week’s reading was revised up to 392,000 from 387,000, matching an April figure as the steepest of 2012.

Concern about the fallout from the European debt crisis and the so-called fiscal cliff that will face the U.S. at the end of this year may prompt employers to keep payrolls lean. Federal Reserve policy makers last week expanded a program to replace short-term bonds with longer-term debt in a bid to spur growth and trim a jobless rate that’s exceeded 8 percent for 40 consecutive months.

“There’s a lot of uncertainty as to the strength of the economy and the outlook,” Sean Incremona, senior economist at 4Cast Inc. in New York, said before the report. “Businesses are reluctant to hire, there’s a lot of uncertainty just due to Europe in addition to the fiscal policy, which are the two headline woes.”

The world’s largest economy expanded 1.9 percent in the first quarter, the same as previously estimated, data from the Commerce Department also showed today.

The median forecast of 46 economists surveyed by Bloomberg News projected claims would come in at 385,000. Estimates ranged from 372,000 to 392,000.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell