The number of U.S. jobless claims dropped to the lowest level in 14 years last week while factory output surged in September, indicating that the U.S. economic recovery remains firmly on the right track.
Fresh applications for state unemployment benefits fell 23,000 to 264,000, a low last touched in 2000, reported the Labor Department on Thursday. Another report by the Federal Reserve indicated that output in U.S. utilities, factories and mines rose 1.0 percent in September, the strongest growth since November 2012.
Investor confidence had earlier taken a hit on Wednesday due to weak retail sales data, resulting in a dollar sell-off that extended until today. Thursday’s unemployment claims data strengthened speculation the job market slack has lessened.
“Have we achieved full employment? Not yet. Are we getting closer? Absolutely,” Stephen Stanley, an economist at Amherst Pierpont Securities, told Reuters.
However, analysts at RBS believe that the job claims report may have been influenced by the U.S. Columbus Day public holiday that may possibly have affected the way the Labor Department smoothes the data for any seasonal fluctuations.
Meanwhile, U.S. mortgage rates dropped, pushing the costs of 30-year loan to less than 4 percent after speculation over global economic slowdown pushed investors to seek the less-risky government bonds.
Mortgage financier Freddie Mac reported that the median rate of a 30-year fixed mortgage fell to 3.97 percent, the weakest level since June 2013. The rate was 4.12 percent a week earlier. The median rate of the 15-year bond plunged to 3.18 percent this week from 3.3 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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