U.S. Labor Market Continues to Struggle Despite Surprising Jobless Claims Fall

on Mar 2, 2021
Updated: Dec 19, 2022

U.S. unemployment benefits fell to a surprising 730,000 last week, according to the data published
by the US Department of Labour despite the ongoing pandemic, extreme weather conditions across the country and second round of stimulus check delays. It also marks the 49th week that the number has consistently been higher than at any point during the 2007 Financial Crisis, following the previously reported 841,000. Moreover, the weekly figures continue to exceed the pre-coronavirus average of 200,000 claims a week.

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Biden’s Plan

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President Joe Biden faces a historic economic turndown with just over 10 million Americans
currently unemployed. Although the labour market is slowly beginning to recover following a sharp decline in coronavirus cases and hospitalizations, due to vaccine rollouts as well as mask-wearing and social distancing measures. Job losses within the leisure, hospitality, retail and travel industries remain dire.

Congress is currently debating Biden’s $1.9 trillion relief package, which will include another round
of $1,400 stimulus checks to be distributed to working families, with a family of four set to receive
up to $5,600. The House bill will also increase the federal weekly boost to $400 from $300 as well as a major expansion of child tax credit. The plan would also provide nearly $130 billion for k-19
schools, $160 billion for coronavirus testing, tracing, and vaccines, roughly $7 billion for small
businesses, and $350 billion for state and local governments, in an attempt to elevate the economic fallout.

What About the USD?

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The Retail Sales January candle is clear evidence that the US consumer will continue to spend
money, surging by 5.3% in January to $568.2 billion. This reading followed a 1% decline in December, outperforming the market expectations for a 1% increase by a wide margin and subsequently causing U.S. Treasury yields to rise. The US Dollar Index was last recorded at 90.57, on the 26th of February. Despite these promising results and the surprise decline in Jobless claims, the Federal Reserve has warned that the labour market will take time to return to the trend.

The impact of Biden’s relief package on the USD remains to be seen. Take advantage of the market volatility and benefit from 1:500 leverage with LonghornFX. Enjoy tight spreads and fast withdrawals on all tradable assets from Currencies to Commodities. Discover more at LonghornFX.

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