· The number of Americans filing for unemployment benefits jumped to a more than two-year high last week amid a surge in applications in hurricane-ravaged Texas, but the underlying trend remained consistent with a strong labor market.
Initial claims for state unemployment benefits surged 62,000 to a seasonally adjusted 298,000 for the week ended Sept. 2, the highest level since April 2015, the Labor Department said. The weekly increase was the largest since November 2012. A Labor Department official said last week’s data had been impacted by Hurricane Harvey.
Despite last week’s jump, claims remained below 300,000, a threshold associated with a robust labor market, for the 131st straight week. That is the longest such stretch since 1970, when the labor market was smaller.
· Mario Draghi said the European Central Bank is watching the euro’s gains as policy makers edge toward settling the future of their bond-buying program.
“The recent volatility in the exchange rate represents a source of uncertainty which requires monitoring” for its impact on price stability, the ECB president told reporters in Frankfurt on Thursday. He said the decisions on QE are “many, complex, and always naturally one thinks about risks that may materialize in the coming weeks or months, so that is the caution behind not specifying a date -- probably the bulk of these decisions will be taken in October.”
ECB staff now see inflation at 1.2 percent in 2018 and 1.5 percent in 2019, well below the goal of just below 2 percent.
· The European Central Bank could be ready as soon as next month with plans to finally start scaling back its extraordinary stimulus efforts as the eurozone’s economy gathers speed.
President Mario Draghi said Thursday that the bank is reassessing the bond-buying program, which is credited with boosting growth by reducing borrowing rates, and could announce changes as early as next month.
· The single currency rose as much as 1.2 percent as Draghi spoke to break above $1.20. It was up 0.9percent at $1.2025 at 3:23 p.m. Frankfurt time.
The euro EUR= soared to a nine-day high of $1.2059. It was last up 0.92 percent at $1.2025.
The dollar index .DXY, which measures the greenback against a basket of six major rivals, fell as much as 1.1 percent to 91.405, its lowest since January 2015.
· The Federal Reserve should continue gradually raising U.S. interest rates given low inflation should rebound, an influential Fed policymaker said in a Thursday speech that sounded slightly less confident than his previous hawkish comments in the face of weak price readings.
New York Fed President William Dudley did not repeat an assertion three weeks ago that he expects to raise rates once more this year, and he called the persistent shortfall in prices surprising. Yet he reinforced the U.S. central bank’s general expectation that an inflation rebound is around the corner, allowing it to continue tightening monetary policy.
· U.S. President Donald Trump said on Thursday he would prefer not to use military action against North Korea to counter its nuclear and missile threat but that if he did it would be a “very sad day” for the leadership in Pyongyang.
· Japan’s economy expanded at an annualized rate of 2.5 percent in the April-June quarter, revised down from a preliminary estimate of 4.0 percent growth, Cabinet Office data showed on Friday.
· Oil futures were mixed on Thursday, with Brent rising to a 5-1/2 month high while U.S. crude slipped on a bigger-than expected crude stock build, as the restart of U.S. refiners after Hurricane Harvey was countered by the threat of Hurricane Irma.
Brent futures LCOc1 gained 29 cents, or 0.5 percent, to settle at $54.49 a barrel, its highest close since April 18for a second day in a row.
U.S. West Texas Intermediate crude CLc1, meanwhile, lost 7 cents, or 0.1 percent, to settle at $49.09 per barrel.
· The U.S. Energy Information Administration said on Thursday U.S. weekly crude stocks increased 4.6 million barrels last week, topping analysts’ forecast for a 4.0-million-barrel build in a Reuters poll. ENERGYUSA [EIA/S]
· Reflecting the impact of Harvey which hit the Gulf Coast on Aug. 25, the EIA said U.S. oil refinery utilization rates slumped 16.9 percentage points to 79.7 percent last week, the lowest rate since 2010.
Reference: Reuters, Bloomberg, Washington Post
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