Initial claims totaled 191k, little changed with last week’s 192k but below the estimate of 197k and still very low. The 4 week average was 196k, also basically unchanged w/o/w. Continuing claims rose 14k w/o/w after falling by 33k in the week before and up 64k in the week before that. At 1.694mm, it’s not far from the highest since February 2022. The bottom line remains the same in this tug of war between a modest pace of firing’s at the same economic growth is no longer and is about to decelerate while hiring’s have moderated. Also, those tech workers getting laid off are getting nice severance checks and likely finding new jobs quickly for those most skilled.
Initial Jobless Claims
Continuing Claims
The Bank of England saw 2 dissenters in their expected 25 bps rate hike to 4.25% with both wanting to do nothing. We know that the BoE has a big inflation problem on their hands but are also straddling the line of recession, a messy stagflationary cocktail. They do though expect inflation to fall notably in the back half of 2023.
The BoE too made it a point to say “the UK banking system maintains robust capital and strong liquidity positions…The FPC’s assessment is that the UK banking system remains resilient.”
As for what comes next, it’s not exactly clear but just as the Fed did yesterday, they left themselves room to hike again “If there were to be evidence of more persistent pressures.”
The pound in response has been a yo yo this morning but is now settling out around the flat line vs the US dollar. The 2 yr gilt yield, on the belief the BoE is possibly done hiking, as they really emphasized their expectations of a sharp drop in inflation, is down a notable 12 bps to 3.37%.
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