Your Thursday ¯\_(ツ)_/¯

Clearly a cause for panic

The lede here is not the weekly unemployment report today, it's the February inflation report from Tuesday, where inflation was 3.2%, rather than the 3.1% forecast, (merciful heavens, I believe that I have the vapors over this!) so everyone is thinking that the sado-monetarists at the Fed will hold off on cutting rates, because they want to see more people out of work.

U.S. inflation was slightly stronger than expected last month but did little to change expectations that the Federal Reserve will begin cutting rates later this year.

Consumer prices rose 3.2% in February from a year earlier, the Labor Department said Tuesday, up slightly from economists’ expectations of 3.1%.

The second straight month of firmer-than-expected inflation is likely to reinforce the central bank’s wait-and-see posture toward rate reductions when officials meet next week. Still, officials are focused on when to cut rates—rather than whether to raise them again. Inflation has declined notably from 40-year highs following the most rapid rate increases in four decades.

………

Still, the report didn’t make the Fed’s coming deliberations easier. Core prices, which exclude food and energy items in an effort to better track inflation’s underlying trend, rose more than expected, both when measured from a year ago and a month ago.

Tuesday’s report “is likely to instill less confidence at the Fed that inflation is fast approaching its 2% target,” said Barclays U.S. economist Pooja Sriram.

When Fed officials meet next week, a key focus will be whether most officials will continue to expect three cuts this year or whether more officials will pencil in just two cuts. The Fed has held its benchmark short-term interest rate around 5.3%, a 23-year high, since last July.

Call me a cynic, but I think that the Fed is looking for an excuse not to cut rates, because it makes them feel powerful.

Meanwhile, initial unemployment claims fell by 1,000 to 209,000, basically flat and under the forecast of 218,000, while continuing claims rose by 17,000 to 1.81 million.

The numbers: The number of Americans who applied for unemployment benefits last week slipped by 1,000 to 209,000 and continued to signal a strong labor market and low level of layoffs.

Economists polled by the Wall Street Journal had forecast new claims to total 218,000 in the seven days ending March 9, based on seasonally adjusted figures.

New jobless claims have ranged from 194,000 to 225,000 a week in the first three months of 2024, an extremely low level from a historical perspective.

Key details: New jobless claims rose slightly in 28 of the 53 states and territories that report these figures to the federal government. But a big drop in claims in New York tied to spring break dragged the headline number down.

The number of people collecting unemployment benefits in the U.S., meanwhile, rose by 17,000 to 1.81 million, the government said.

These so-called continuing claims have risen slowly if steadily since last year in a sign that it’s taking longer for people to find new jobs.

At the same time, though, the government’s annual revisions also show continuing claims to be about 100,000 lower than previously estimated.

I still think that things are far less rosy than the unemployment numbers, because deaths and disability, largely related to Covid have kept people out of the labor force.

What happens next?  Not a bloody clue.