Unit Labour Costs Decline As Productivity Improves

Key Insights

• Initial Jobless Claims increased from 212,000 to 217,000. 
• Continuing Jobless Claims grew from 1.78 million to 1.82 million. 
• Unit Labour Costs decreased by 0.8% in the third quarter.

On November 2, U.S. released Initial Jobless Claims report, which indicated that 217,000 Americans filed for unemployment benefits in a week. Analysts expected Initial Jobless Claims of 210,000.

Continuing Jobless Claims increased from 1.78 million to 1.82 million, compared to analyst consensus of 1.8 million.

Importantly, Unit Labour Costs declined by 0.8% in the third quarter, while analysts expected that they would grow by 0.7%. Non Farm Productivity increased by 4.7%, compared to analyst consensus of 4.1%.

U.S. Dollar Index tested session lows after the release of the reports. Traders continue to digest Powell’s words and bet that Fed will not raise rates again. Treasury yields are moving lower, and the yield of 10-year Treasuries has already declined towards the 4.65% level. Falling yields put additional pressure on the American currency.

Gold moved towards the $1990 level, supported by weaker dollar and lower Treasury yields. Demand for safe-haven assets also provides support to gold markets as traders stay focused on the developments in the Middle East.

SP500 futures moved towards the 4280 level in premarket trading. The market sentiment is bullish as traders bet on a less hawkish Fed.

For a look at all of today’s economic events, check out our economic calendar.