U.S. Rate Risks Rise as Jobless Claims Fall Again, 2Q GDP Revised Higher
2022.08.25 16:14
By Geoffrey Smith
Investing.com — The chances of another 75 basis-point increase in U.S. interest rates strengthened on Thursday, as weekly labor market data again turned out stronger than expected.
At the same time, revised statistics showed that the economy shrank less than initially reported in the second quarter.
The Labor Department said initial claims for jobless benefits fell to 243,000 last week, their fourth decline in the last five weeks, in a fresh show of strength from the labor market. The numbers suggest that there are still more than enough job openings in the economy to absorb a pickup in the rate of lay-offs. Continuing claims also fell by 19,000 to 1.415 million.
At the same time, the Bureau of Economic Analysis revised up its estimates for gross domestic product in the second quarter to show an annualized drop of 0.6%, rather than the 0.9% initially reported.
The numbers come hours after The Wall Street Journal published an interview with Atlanta Federal Reserve President Raphael Bostic saying that it may be necessary to raise the Fed Funds target range by another 75 basis points in September if economic data stay strong.
