Jobless Claims Increase
Jobless claims in the U.S. rose by 4,000 this week; the fourth time it has risen in the past five weeks. This report is a sign that the economy is still adding jobs at an inadequate rate. Jobless claims indicate layoffs and this week’s report exceeded the projections of economists by 2,000. The four week “moving average” of claims increased 2,750 to an aggregate 361,250. This comes during a time of mounting debate for tapering the Federal Reserve’s stimulus package; with a weak job report and acceptable levels of inflation, it is likely that the Fed will continue its bond buying program for a while longer.
Eric Rosengren, Chairman of the Fed in Boston, previously voiced his belief that economic growth this quarter will be minimal but projected a 3% increase for the second half of 2013. He believes that the unemployment rate will fall to 7.2% by the years end; a level when he would be comfortable in modifying the current monetary policy of the Fed. I remain less optimistic than Mr. Rosengren in his projections although I’d be more than happy to be proven otherwise.
Source: The Wall Street Journal