The upshot of the Fed minutes yesterday is that the Fed remains upbeat about the prospect of future improvements in the US labour market, and while the majority of the committee was cautious about introducing a taper, should these improvements come to pass, tapering will continued.
Today’s jobless claims report, which came in a touch better than expected, would seem to justify the Fed’s optimistic viewpoint. First time claimants for jobless benefits decreased by 15,000 to 330,000 last week, which sees a drop in the four-week moving average from 358,750 to 349,000.
Jobless claims have possibly been skewed in recent weeks by seasonal distortions, and this latest report might still fit in that bracket, meaning that tomorrow’s official employment data will give us the clearest picture yet of how December fared jobwise.
Inflation aside, which remains bothersomely below target, there is nothing in recent economic data to suggest the Fed will be forced to stay its hand from ploughing forward with successive tapers, and this appears to have vexed the stock market today, with index benchmarks floundering in the red for much of the morning in New York.