The US Dollar continues to strengthen against the Euro as the world’s largest economy continues to show signs of improvement.
The number of US citizens claiming unemployment benefits dropped unexpectedly last week to its lowest level for two months. The US labour market continues to show signs of improvement, last week data showed that employment rose by 236,000 in February.
According to the Washington based Labour Department First-time jobless claims fell by 10,000 to 332,000 in the week ending on the 9th of March, the lowest number since mid January. The data yet again took ‘experts’ by surprise as most economists had been predicting a rise to 350,000.
The good jobs data has increased optimism that the US will be able to ride out the tax hikes that came into force at the beginning of the year. Despite the strength of the jobs market currently investors should be aware of a possible pitfall that could be created by the as not yet fully introduced federal budget cutbacks take effect.
“Businesses are not cutting their workers — there’s very little reason for them to be cutting workers,” Ryan Sweet a senior economist at Moody’s Analytics Inc. said before the report. “The economy seems to have done reasonably well in the first quarter, given the fiscal drag.”
The budget cuts began to take effect on the 1st of March and may cause some government agencies and companies to cut some of their staff. The sequestration cuts as they are called total around $85 billion.
Comments are closed.