Further progress in the US labour market

For the first time in 21 weeks, the number of initial claims for benefits in the United States fell below 1 million, to 964K for the week ending August 8. The number of continued claims a week earlier decreased by 604K, to 15,486K.

Both figures exceeded expectations, causing a moderate growth impulse in the stock market immediately after publication. The sharp progress, despite the difficult situation with the pandemic in the US, is likely linked to the end of additional payments programs.

Special $600 per week benefits for the unemployed came to an end in August. Thanks to this program, some workers were paid more than their regular wages, so it benefited them not to work.

Last week, President Donald Trump issued an executive order that would provide $300, but it may take weeks for implementation. During this time we may see a drop in the number of unemployed, as people will agree to lower wages. This will brighten up employment figures, but lower household incomes.

The FxPro Analyst Team