US initial jobless claims fall to 52-year low

Fed’s go-to inflation indicator rises to 30-year high

US initial jobless claims fell to their lowest level in 52 years last week, further bolstering confidence in the nation’s post-Covid recovery. 

Jobless claims

First-time jobless claims sank by 71,000 to 199,000, the lowest since 1969 and below the 220,000 low reached shortly before the health crisis. 

The continuous claims fell to their lowest level since March 2020, dropping by 60,000 to 2.05 million. 

Inflation

Wednesday also saw the US Commerce Department announce that purchases of goods and services, unadjusted for changes in prices, a favourite inflation metric of the Federal Reserve, rose 1.3% in October, more than double the 0.6% increase seen in September. 

While private worker wages rose to a joint all-time high of 8.4% year-on-year, public worker wages fell to 11.0%, the lowest in eight months. 

When asked about persistent price rises recently, US Vice President Kamala Harris described inflation as “one of the highest priorities” of the Biden administration.

Harris hailed the Build Back Better infrastructure bill as a key factor in reducing the cost of living in the long-term. 

To some legislators, even those on the Democratic side of the aisle, the $1.75trn spending package will only exacerbate inflation. 

Responding to the US Labor Deprtment’s recent statement that prices rose by 6.2% in the past 12 months, Senator Joe Manchin, a key holdout, recently said: “By all accounts, the threat posed by record inflation to the American people is not ‘transitory’ and is instead getting worse. From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day.”

By 11 am EDT (UTC-5), the Dow Jones traded down by 0.2%, while the S&P and Nasdaq stood flat.

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