The U.S. dollar takes another one to the chin this week despite a late week rally on Friday. U.S. economic data was less than impressive this week and Fed officials re-iterated the party line of maintaining low interest rates as the employment situation in the U.S. continues to struggle in its recovery.
United States Headlines and Economic data
“Nearly 9 million fewer Americans are working now than last February.”
“The unemployment rate will remain elevated for years to come without more federal support, according to a non-partisan report.”
“Owners expecting better business conditions over the next six months declined seven points to a net negative 23%, the lowest level since November 2013.”
“Hires decreased to 5.5 million while total separations were little changed at 5.5 million. Within separations, the quits rate and layoffs and discharges rate were little changed at 2.3 percent and 1.3 percent, respectively.”
Consumer price index increased 0.3% last month after climbing 0.4% in December. In the 12 months through January the CPI rose 1.4% after a similar gain in December.
“Powell noted that the actual unemployment rate is probably closer to 10% and said the Fed needs to stay focused on its “broad and inclusive” employment goal.”
“Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy,” Powell said in remarks to the Economic Club of New York. “It will require a society-wide commitment, with contributions from across government and the private sector.”
“The budget gap in the first four months of the current fiscal year was 89% higher compared to a year earlier — $736 billion vs. $347 billion.”
“The weekly unemployment claims report from the Labor Department on Thursday, the most timely data on the economy’s health, also highlighted labor market scarring, with over 20 million people collecting unemployment checks in late January.”
“I don’t think the economy requires herd immunity,” Richmond Federal Reserve Bank President Thomas Barkin told Reuters Thursday. “Consumers who get vaccines, who have money in their pockets…are going to be free to spend,” he said.
“The University of Michigan’s consumer sentiment index slipped to a reading of 76.2 in the first half of this month, attributed entirely to households with incomes below $75,000. That was down from a final reading of 79 in January. Economists polled by Reuters had forecast the index little changed at 80.8.”