Initial unemployment claims in the US have fallen for the third week in a row. That’s a bullish indicator for the job market and economic recovery. 📈
In the period ending Aug. 7, 375,000 people filed for unemployment. Continuing claims (the number of people still collecting unemployment after one week) measured 2,866,000 in the previous week. Those figures are a far cry from the 23,128,000 continuing claims we saw at COVID’s peak. In fact, they’re the lowest numbers we’ve seen since mid-March 2020.
The end of enhanced unemployment sent millions back to work, but not everyone is rushing back — there were 10.1 million job openings in June, and over 8.7 million unemployed in July. 🤔 To bring employees back, companies are pushing more aggressive benefits and better pay. But “better pay” could just be the result of inflation.
As more people go back to work, inflation could increase even more. Inflation has run hot as the economy recovers from the worst of the pandemic. But higher inflation means more urgency to raise interest rates down at the Fed. Interest rates will likely rise as people go back to work, but if they do… it’ll spell trouble for most investors.