PREVIOUS TRADING DAY EVENTS 17 August 2023

The number of Americans filing new claims for unemployment benefits fell last week. The fall was about 11K which is not considered very high, however, it shows that the labour market is hot and refuses to get much affected by the recent Fed policy. 

Other data reported this week showed an actual increase in retail sales in July. Demand is on the move and steady raising the risk that the Federal Reserve could hike interest rates once more.

The labour markets are not imploding, said Christopher Rupkey, chief economist at FWDBONDS in New York. The economy may be heating up instead of cooling down as the monetary medicine of higher 5.5 interest rates is not slowing aggregate demand like the economics textbooks say it should.

The minutes of the Feds July 2526 meeting were published on Wednesday noting that further progress toward a balancing of demand and supply in the labour market was needed, expecting that additional softening in labour market conditions would take place as time passes. 

Most economists believe the rate hiking cycle is likely over, given the recent moderation in inflation.

The labour market is still strong but much more balanced than during the severe worker shortages of the early recovery from the pandemic, said Bill Adams, chief economist at Comerica Bank in Dallas.

Source httpswww.reuters.commarketsususweeklyjoblessclaimsfalllabormarketremainstight20230817

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