For the past several months, there have been two "T" words that have captivated the financial markets.
The first, of course, is the "Taper," which now looks like it may be starting as early as next month. Following its September monetary policy meeting, the Federal Reserve—using its usual weasel words—didn't exactly say it was ready to taper, but basically confirmed that it would begin soon, saying that "a moderation in the pace of asset purchases may soon be warranted." So we can probably expect the Fed to provide more definite information following its next meeting in early November, and that may include a start date of later that month.
The second "T" word is "Transitory," as in the "inflation is transitory" mantra Fed chair Jerome Powell has been repeating for most of 2021. However, recently he's backed off a little on that stance, telling Congress last month that while he believes inflation will eventually return to the Fed's 2% target rate, "these effects have been larger and longer-lasting than anticipated." In other words, maybe inflation isn't as transitory as he says, therefore the need to taper.
Now, after two crummy monthly job reports in a row, it may be fair to ask if the shortage of workers holding back the economy isn't transitory either. Continue reading "Is The Worker Shortage Transitory?" →
The number of Americans seeking unemployment benefits fell 15,000 last week to a seasonally adjusted 330,000, signaling fewer layoffs and steady job growth.
The Labor Department said Thursday that the less volatile four-week average dropped 9,750 to 349,000.
A Labor spokesman said there was no indication that snow and freezing weather around much of the country caused the drop in applications. The number of applications could fluctuate in the coming weeks because of harsh winter weather that closed some offices this week and last, said Yelena Shulyatyeva, a U.S. economist at the bank BNP Paribas.
Applications are a proxy for layoffs. They appear to have stabilized near pre-recession levels after a period of volatility around the Thanksgiving and Christmas holidays. That suggests recent job gains will continue. Continue reading "U.S. unemployment benefit applications fall to 330,000" →
U.S. unemployment benefit applications rose 16,000 last week to a seasonally adjusted 360,000, although the level remains consistent with steady hiring.
The Labor Department said Thursday that the less volatile four-week average increased 6,000 to 351,750.
The weekly applications data can be volatile in July because some automakers briefly shut down their factories to prepare for new models and many schools close. Those factors can create a temporary spike in layoffs.
The broader trend has been favorable. Applications have declined steadily in the past year, as companies have laid off fewer workers and stepped up hiring. In the past six months, employers have added an average of 202,000 jobs a month. That's up from an average of 180,000 in the previous six months. Continue reading "Unemployment Benefit Applications Rise" →