U.S. initial jobless claims rise to 6-month high in December, raise doubts over Yellen’s hawkish tone

Initial jobless claims in the United States rose to 6-month high during the period of December, raising doubts over the hawkish tone delivered by Federal Rserve Chair Janet Yellen in the latest monetary policy meeting held this month. Yellen, besides, raising the Fed fund rate by 25 basis points to 0.50-0.75 percent, also added that the central bank would undertake three more rate hikes in 2017.

Initial jobless claims for the week ending December 17 rose to 275k, well above market consensus of 257k. The four-week moving average rose to 268k. The initial claims data cover the survey week for the December employment report. Continuing claims for the week ending December 10 also increased, to 2036k from an upwardly revised 2021k, data released by the Labor Department showed Thursday.

At the state level, the rise in initial claims was driven by a handful of states that registered a substantial increase. Wisconsin (2.7k), California (2.3k), Michigan and Washington (2.2k each) posted the largest increases on a seasonally adjusted basis.

Similarly, the rise in continuing claims was led by large increases in a few states, while the other states reported only modest changes. On the whole, despite today’s weaker-than-expected report, further improvement in labor market conditions can be expected through this year.

Meanwhile, the dollar index traded at 103.04, down -0.05 percent, while at 4:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 10.40 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex