US Weekly New Unemployment Claims Drop Most in 5 Weeks‥Inflation Stagnates

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Although the number of new unemployment claims in the US has significantly decreased, the inflation situation still fell short of expectations.

The US Department of Labor announced on the 12th (local time) that the number of new unemployment benefit claims for the past week (November 1?7) was 700,900. This is a decrease of 48,000 claims compared to the previous week.

The number of new unemployment claims has been declining for four consecutive weeks and showed the largest drop in the past five weeks. Last week's claims were also well below the Dow Jones consensus estimate of 740,000.

The number of continuing unemployment claims, which counts those claiming benefits for at least two weeks, decreased by 436,000 to 6.79 million.

CNBC reported that the unemployment figures indicate signs of improvement in the labor market, but still noted that about 21 million people are receiving unemployment benefits.

The recent surge in COVID-19 infections and the resulting economic activity contraction have led many media outlets to express a negative outlook for the future.

Although last week's claims were the lowest since the COVID-19 outbreak, they remain higher than the previous record high of 695,000 in October 1982.

Inflation was confirmed to be stagnant. The inflation rate for October announced by the Department of Labor on the same day was 0%, unchanged from the previous month. This result fell short of the previous month's 0.2% increase as well as the expected 0.1% rise. Year-over-year inflation also rose only 1.2%, down from the previous month's 1.4% increase.

The core inflation rate, which excludes volatile food and energy prices, also showed no change compared to September.

A major foreign news outlet forecasted that the Federal Reserve's target inflation rate of 2%, which serves as a benchmark for interest rate hikes, will be difficult to achieve in the near term.