Read the highlights of this week’s commentary from Helios:
- US continuing unemployment claims reached 1.9 million as of January 11, the highest since November 2021, indicating challenges in job market re-entry. Initial claims rose by 6,000 to 223,000, remaining close to pre-pandemic levels. Seasonal fluctuations and external factors like weather are expected to affect these figures in the coming weeks.
- US business activity expanded at its slowest rate in nine months due to a slowdown in the services sector. Despite this, businesses remain optimistic about future demand, which has increased employment since mid-2022. However, inflationary pressures are increasing, as evidenced by rising material costs and output prices in both manufacturing and services.
- The Federal Reserve is expected to keep interest rates unchanged at its meeting on January 29. This decision aligns with December’s inflation data, which indicates that inflation is in line with the Fed’s target of 2% despite strong job and GDP growth. Fed Chair Jerome Powell is focused on demonstrating the Fed’s independence amidst political pressures, highlighting a commitment to economic stability over political influence.
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