U.S. weekly jobless claims likely to increase, unemployment rate to hold near 4.7 pct

The United States weekly jobless claims report will be published on Thursday, 12 January at 13:30 GMT. We foresee that the initial claims for the week ending 7 January will increase to 2,50k, up from 235k observed in the previous week.

However, despite gradual further improvement in employment conditions we anticipate continuing jobless claims should remain elevated for some time but should continue along a downward path in the months to come.

An initial claims result of 250k would yield a decrease in the four-week moving average to 255.8k, down from 256.8k. Reflected in the volatility seen in recent months, conditions in the labour market will continue to be tenuous as firms look for a sustained pickup in sales activity before increasing employment opportunities.

This implies an unemployment rate likely holding near the 4.7 percent reading seen the December employment release. Upward pressure in continuing claims will be seen from people unable to find employment amidst this sizeable contraction, providing a floor in continuing claims in the 2.0-2.5 million range in the months ahead.

Meanwhile, the S&P 500 Futures traded 6.50 points lower at 2,264 by 07:10 GMT, while at 12:00 GMT, the FxWirePro's Hourly Dollar Strength Index remained highly bearish at -164.20 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex