U.S. weekly jobless claims unexpectedly increase
Jobless claims in the United States unexpectedly rose last week, led by an increase in claims from California.
This comes as the state moved more residents to alternative aid schemes, following the expiration of the government-funded unemployment bill.
Overall, the data from the Labor Department showed that claims for unemployment benefits were up by 11,000 to 362,000 versus forecasts of 335,000.
|💡 Why do jobless claims affect the market? |
Many financial analysts incorporate estimates of the report into their market forecast. If a weekly release on jobless claims comes insignificantly different than consensus estimates, this can move the markets higher or lower. Generally, the move is the inverse of the report. If initial jobless claims are down, the market will often rally upwards. If the initial jobless claims are up, the market may slump.
The Initial Jobless Claims Report gets a lot of press due to its simplicity and the basic assumption that the healthier the job market, the healthier the economy. That is, more people working means more disposable income in the economy, which leads to higher personal consumption and gross domestic product (GDP).
The report, which was for the week ending September 25th, saw the number of applications rise for a third consecutive weekly increase.
Claims in California rose by 17,978, and this was one of the contributing factors to the S&P 500 trading lower on Thursday.
FTSE 100 falls despite revised GDP growth
The FTSE 100 in the United Kingdom was also trading lower, this came despite revised data showing better than expected GDP growth.
Data from the Office for National Statistics initially reported that Britain’s GDP grew by 4.8% in Q2, however this was revised up to 5.2%.
Thursday’s announcement means that the UK is no longer the worst performing nation in the G-7, and is now above Italy, tying Germany.
|💡 What is the G7?|
The Group of Seven (G-7) is an intergovernmental organization made up of the world’s largest developed economies: France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada. Government leaders of these countries meet periodically to address international economic and monetary issues, with each member taking over the presidency on a rotating basis.
The G-7 was, for a while, known as the Group of Eight (G-8), until 2014 when former member Russia was removed after annexing the region of Crimea illegally from Ukraine.1
The European Union (EU) is sometimes considered to be a de-facto eighth member of the G-7 since it holds all the rights and responsibilities of full members except to chair or host meetings.
Bank of England Governor Andrew Bailey now believed that the nation’s GDP will reach pre-pandemic levels early next year.
Despite this news, the FTSE 100 closed 0.31% lower.
Shares in United Airlines were trading lower in today’s session, as the company reported that several employees still remain unvaccinated.
The company recently announced that it would “fire” all employees that opt not to get a COVID-19 vaccine.
Since this announcement the number of unvaccinated employees dropped from 593 Monday to 320 people on Thursday.
|💡 Are mandated COVID vaccines legal in the workplace?|
The U.S. Equal Employment Opportunity Commission (EEOC) issued guidance stating that employers generally can mandate COVID-19 vaccinations for employees who physically enter the workplace without running afoul of the federal anti-discrimination laws it enforces.
In response to questions about whether employers can mandate a vaccine authorized under emergency use, the agency said, “It is beyond the EEOC’s jurisdiction to discuss the legal implications of EUA or the FDA approach.”
Regarding its policy, the company stated that, “Our vaccine policy continues to prove requirements work — in less than 48 hours, the number of unvaccinated employees who began the process of being separated from the company has been cut almost in half, dropping from 593 to 320”.
Shares in $UAL were 2.68% lower as of writing.
Quote of the day – “Markets can remain irrational longer than you can remain solvent.”– John Maynard Keynes