The pound remained firmly at 1.37 against the dollar on Thursday. A barren economic calendar in the UK yesterday and the lingering impact of the US Federal Reserve’s minutes from its pivotal June 16 meeting meant it lacked impetus. Fed officials’ patient tone in terms of tightening monetary policy, which sent the dollar higher on Wednesday, continued to weigh on the pound.
While it was not a busy day on the economic data front in the US on Thursday, there was one influential release: initial filings for unemployment insurance unexpectedly rose last week, but continuing claims fell, the Labor Department reported – further proof that the US labour market recovery from the pandemic continues to be uneven and could face hurdles in the future.
US businesses have reopened at a rapid pace as lockdown restrictions are rolled back and following the vaccination of more than 155 million Americans against Covid-19. However, the employment market recovery has been far from steady despite recent gains.
First-time jobless claims rose 2,000 to a seasonally adjusted 373,000 for the week ended July 3, compared with the 350,000 forecast by economists, the Labor Department said. The level for the week ended June 26 was revised up by 7,000 from 364,000 to 371,000.
The number of continuing claims – the measure of ongoing benefits – declined to 3.339 million during the week ended June 26, down 145,000 from the previous week’s revised level, the claims report showed.
The claims data follows an upbeat monthly jobs report from the Labor Department last Friday, which revealed companies in the US hired the most workers since August 2020 last month.
UK economic growth slower-than-expected
Slower-than expected growth in the British economy in May from April has raised questions about the strength of the rebound from lockdown restrictions. Gross Domestic Product (GDP) month-on-month growth of 0.8% fell well short of economists forecast of 1.5% the Office for National Statistics (ONS) revealed on Friday. The ONS also revised down its GDP in April to 2.0% from its original estimate of 2.3%.
The Federal Reserve Board is required to submit written reports to Congress under the Federal Reserve Act. These contain discussions of “the conduct of monetary policy and economic developments and prospects for the future.” Called the Monetary Policy Report, the first of its semi-annual submissions is due today.