Economy

Initial claims for state unemployment benefits rose 4,000 to a seasonally adjusted 232,000 for the week ended Aug. 17, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.The latest data should continue to allay fears that the labor market is rapidly deteriorating, first raised after a much sharper than expected slowdown in job gains in July, which also saw the unemployment rate rise to a post-pandemic high of 4.3%.Federal Reserve officials have said they are keenly watching the labor market, aware that waiting too long to cut interest rates could cause serious harm. Layoffs remain historically low, however, with much of the slowdown in the labor market coming from firms scaling back hiring, trailing an immigration-induced surge in labor supply. The Federal Reserve’s 525 basis points worth of rate hikes in 2022 and 2023 are curbing demand.The U.S. central bank has kept its benchmark overnight interest rate in the current 5.25%-5.50% range for more than a year but is now widely expected to begin a rate-cutting cycle at its next policy meeting on Sept. 17-18.The number of people receiving benefits after an initial week of aid, a proxy for hiring, rose 4,000 to a seasonally adjusted 1.863 million during the week ending Aug. 10, the claims report showed. More

The ECB left rates unchanged at that meeting and gave almost no hint about its future policy moves but the accounts reveal concerns about restricting economic growth too much and show increasing comfort that bringing euro zone inflation down to the 2% target was on track.”A gradual attenuation of policy restriction was a balancing act, as it was also important not to unduly harm the economy by keeping rates at a restrictive level for too long,” the accounts showed. “It was … important to keep an eye on the real economy.””The September meeting was widely seen as a good time to re-evaluate the level of monetary policy restriction,” the ECB added. “That meeting should be approached with an open mind”The ECB was among the first major central banks to cut rates in June and euro zone economic data in the past six weeks have largely supported the case for further easing.Growth in negotiated wages, a key metric to gauge future price pressures, slowed sharply in the second quarter, while economic growth has been anaemic with Germany, the bloc’s biggest economy, skirting a recession. That is why markets now see a more than 90% chance of a 25-basis-point rate cut next month, followed by at least another step this year, possibly in December.”While there could still be upside surprises to wage growth later in the year, today’s wage growth reading makes a September cut by 25bp even more likely,” ING economist Bert Colijn said.The ECB has long been concerned about rapid wage growth but the accounts suggest that policymakers are becoming more relaxed.”It was comforting to see that domestic cost pressures from high wage growth, including in the services sector, had been increasingly buffered by unit profits,” the accounts showed.Policymakers also thought that inflation was well on its way back to target and inflation was progressing along its long-outlined criteria, putting price growth back at 2% by the end of next year. More

“We’ve got some data sets to come in before September,” Schmid said in an interview with broadcaster CNBC at the start of the annual global central bankers’ conference hosted by the regional Fed bank in Jackson Hole, Wyoming, in reference to the Fed’s next policy meeting on Sept. 17-18. “It bears looking harder at it,” he said of the unemployment rate. “I’m going to let the data show where we lead…I would agree with several of my colleagues that you probably want to act maybe before (inflation) gets to two (percent) but that sustainability to two I think is really important.”The U.S. central bank is widely expected to begin reducing its benchmark policy rate at its upcoming meeting, with most Fed officials buoyed by encouraging inflation data and increasingly anxious about the health of the job market. More

September futures on the S&P/TSX index were unchanged at 0.0% at 6:51 a.m. ET (10:51 GMT).Materials shares will be in the spotlight as gold prices fell on a firm dollar, while copper prices rose. [GOL/] [MET/L]The energy sector will also remain in focus as oil prices edged higher. [O/R] The S&P/TSX composite index notched a record high in the previous session, boosted by tech shares on increased prospects of lower borrowing costs globally. Minutes from the U.S. Federal Reserve’s July policy meeting showed on Wednesday a “vast majority” of policymakers said a September rate cut would be likely.Data-wise, investors will now parse through weekly jobless claims and purchasing managers index (PMI) surveys out of the United States, which can shed more insight into the health of the economy.However, the event of the week will be Fed Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium on Friday.Traders will follow the commentary for hints of the Fed reducing U.S. interest rates next month, where market participants are pricing in a 69.5% chance of a 25-basis points cut.In Canada, investors geared up for bank earnings, started by Toronto-Dominion Bank that reported a quarterly loss. Canadian National Railway (TSX:CNR) and Canadian Pacific (NYSE:CP) Kansas City shut down their rail networks in the country and locked out about 10,000 workers after labor talks with the Teamsters union failed.COMMODITIES Gold: $2,507.40; -0.18% [GOL/]US crude: $72.14; +0.29% [O/R]Brent crude: $76.37; +0.42% [O/R]FOR CANADIAN MARKETS NEWS, CLICK ON CODES:TSX market report (TO)Canadian dollar and bonds report [CAD/] [CA/]Reuters global stocks poll for CanadaCanadian markets directory($1 = 1.3579 Canadian dollars) More

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Jerome Powell, the Federal Reserve chair, will deliver remarks as inflation cools and growth holds up — but as labor market weakening threatens to interrupt the soft landing.Two years ago, Jerome H. Powell took the podium at the Federal Reserve Bank of Kansas City’s annual conference at Jackson Hole in Wyoming and warned America that lowering inflation would require some pain.On Friday, Mr. Powell, the Federal Reserve chair, will again deliver his most important policy speech of the year from that closely watched stage. But this time, he is much more likely to focus on how the Fed is trying to pull off what many onlookers once thought was unlikely, and maybe even impossible: a relatively painless soft landing.Both the Fed and the American economy are approaching a crossroads. Inflation has come down sharply since its 2022 peak of 9.1 percent, with the year-over-year increase in the Consumer Price Index falling to 2.9 percent in July. Given the progress, the critical question facing Fed officials is no longer how much economic damage it will take to wrestle price increases back under control. It is whether they can finish the job without inflicting much damage at all.That remains a big if.Consumer spending and overall economic growth have held up in the face of high interest rates, which are meant to cool demand and eventually weigh down inflation. But the job market is beginning to weaken. Revisions released this week showed that employers hired fewer workers in 2023 and early 2024 than was previously reported. The unemployment rate rose to 4.3 percent in July, up from 4.1 percent in June and 3.5 percent a year earlier. The latest jump could be a fluke — a hurricane messed with the data — but it could also be an early warning that the economy is hurtling toward the brink of a recession.That makes this a critical moment for the Fed. Officials have held interest rates at a two-decade high of 5.3 percent for a full year. Now, as they try to secure a soft and gentle economic landing, they are preparing to take their foot off the brake. Policymakers are widely expected to begin lowering rates at their meeting in September.Mr. Powell could use his speech to confirm that a rate cut is imminent. But most economists think that he will avoid detailing just how much and how quickly rates are likely to drop. Fed officials will receive a fresh jobs report on Sept. 6, providing a clearer idea of how the economy is shaping up before their Sept. 17-18 meeting.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More