US unemployment Claims Tick Higher

During the Thursday session the US Department of Labor released the weekly Unemployment Claims figure, disappointing the market with a higher than expected 372,000 new claimants for unemployment insurance during the previous week. Adding to this concern is the fact that the Department of Labor (https://www.dol.gov/opa/media/press/eta/ui/current.htm) also revised the previous week’s announcement from 366,000 to a new reading of 368,000 new filings.

Certainly the new claims numbers will figure into the Federal Reserve's monetary policy decision in September, but more importantly the numbers aren't deteriorating too rapidly. In other words, the Federal Reserve will more than likely have to stay on the sidelines as the looming presidential election and Fiscal Cliff debacle in the United States could have major implications for what the Federal Reserve has to do next. This number although disappointing, isn't going to be enough to make the Federal Reserve move.

This does however bring up an interesting problem. It appears that both the Americans and Canadians are starting to see further weakness in their employment numbers, and as such North America seems to be slowing down as well. Couple this with Chinese economic slowdown and without a doubt the massive problems in Europe, and we could be looking at the beginnings of a global slowdown yet again.