The number of Americans filing for unemployment benefits increased more than expected last week. Claims rose to 219,000 for the week ended February 22 according to the Labor Department, above expectations of 212,000. The figures are still in line with those of a healthy labor market.
- Jobless claims rose 8,000 to 219,000 vs. 212,000 expected for the week ended February 22.
- The four-week average rose 500 to 209,750 last week, and continuing claims fell 9,000 to 1.72 million.
- Data for the week before was revised higher by 1,000.
The labor market appears to be in good health toward the end of February, despite an unexpected rise in jobless claims. The Labor Department stated that claims for Alabama were estimated. The four-week average of claims, which tends to be less volatile than the weekly figure, rose 500 to 209,750 last week.
Claims continuing after an initial week of aid fell 9,000 to 1.73 million, and the four-week average of these claims rose 5,250 to 1.73 million. The continuing claims data covered the period when the government surveyed households for the rate of unemployment in February, and indicates an improvement in unemployment in February compared to last month, when it rose to 3.6%. There is no indication of layoffs growing the US economy according to the latest jobless claims readings.
Still no sign of coronavirus-related fallout in US jobless claims, a key leading indicator. New filings for unemployment benefits rose modestly last week, but at 219k the latest update continues to reflect historically low levels of layoffs: https://t.co/WSKvEcBzRV pic.twitter.com/KinuypUovz
— James Picerno (@jpicerno) February 27, 2020
Ongoing health in the labor market is crucial for the support of the ongoing period of US expansion, now in its 11th year. With the coronavirus outbreak likely to place pressure on the US economy, strong labor is needed to support healthy consumer spending which accounts for two-thirds of US economic activity. The global stock markets dropped $1.7 trillion earlier in the week due to fears surrounding the outbreak, which saw 10% of the world’s population placed under quarantine in February and has now reached all populated continents.
Gold prices have held above $1,650 following reports of sub-expectation jobless claims and in-line Q4 GDP readings. Spot gold last traded at $1,657.24/oz, up 1.05% with a high of $1,657.24/oz and a low of $1,637.50/oz. The coronavirus is forecast to drag on global GDP significantly, putting the world economy on track for the worst year since the financial crisis, and this is strengthening the use case for gold in the financial markets.