Can it affect July NFP?
Like every Thursday, we were waiting for US jobless claim numbers. Published data surprised markets a bit; however, it is still expected that overall labor market data stay positive. We can see another month of significant growth in the Labor Market in July.
According to the Labor Department data, for the week ended July 17, Initial Jobless Claims to receive the unemployment benefits increased 51K to 419K. The market forecast was 350K for this period.
At the same time, continuing jobless decreased, even though if this decrease is less than expectations, the continuing claims, which usually report with a one-week lag, have been decreasing since late June. Based on published data, continuing jobless claims fall to 3.236M from 3.265M; however, it is missing the market expectations by 3.1M claims.
With this week`s numbers now the 4-weeks average by July 16, we have the average a bit increased to 385.25K from the previous 384.5K.
The expended unemployment benefits will be ended on Sep. 6; however, we have 20 states led by Republican governors that have terminated the Federal benefits earlier. We have mixed data at the moment about the results of this earlier withdrawal of expanded benefits that it was encouraging to go out and research the job or not.
"It will not likely be until the details of the July employment report are released that we will know if states ending benefits programs early had a notable increase in employment," said Veronica Clark, an economist at Citigroup (NYSE: C) in New York.
In any case, these numbers telling us that the labor market is still suffering, and we have claims twice more than pre-pandemic. Earlier in 2020, right before the pandemic started, Jobless Claims were less than 250K on average.
In response to these data, the USD index falls sharply by 0.3% to 92.50. These numbers show that recovery is still far from expectations, and the market can count on FED stimulus, and in general, it is negative for US Dollar value.
