Dollar Continues To Rise As Jobless Claims Fall, Economic Growth Modest

The dollar continues to rise today, with the greenback holding firm after better-than-expected unemployment claims statistics. On risk-off mood, the yen is the second strongest currency, with major European indices and US futures in the red.

The US economic growth rate in the third quarter was revised up to a tenth of 2.1%. Driven by less than the initial report (-24.4% vs. -26.2% forecast), consumer spending growth has also been revised up by one-tenth to 1.7% (compared to 1.6% in the early release). This was partially offset by a reduction in service spending (+7.6% vs. +7.9% adv.).

The overall growth of business investment was slightly lowered to 1.5(from 1.8%). The downward revision of intellectual property products is offset by the upward revision of equipment and structural expenditures.

Modifications to residential investment, government spending, and imports and exports are also negligible. The contribution of inventory construction to growth was revised up by one-tenth to 2.1 percentage points.

The company’s profit was reported in the second estimate, showing that the profit was as high as US$121.4 billion (or 18.4% per annum), which was lower than the US$267.8 billion in the second quarter. The share of corporate profits in GDP continues to rise and is currently 12.7%, the highest share in more than 60 years.

The economic situation in the second quarter remained unchanged. The slowdown in growth is mainly due to the slowdown in consumer spending from the stimulus in the first half of the year, and the shortage of cars has exacerbated this trend. Service spending growth remains healthy, and there is evidence that the wave of Delta infections has slowed the growth rate slightly.

The Surge in Dollar Going Stronger

After a slew of US statistics suggested stubbornly high inflationary pressures and imminent Federal Reserve intervention to counteract their effects on the economy, demand for the greenback remained strong.

According to the Core Personal Consumption Expenditures Price Index report released on Wednesday, US inflation hit its highest level in 30 years in October. The FOMC also released the minutes from its November meeting.

If inflation continues to rise faster than expected, officials believe they should be prepared to modify the pace of asset purchases tapering and boost the target range for the federal funds rate sooner than expected, according to the document. Despite this, the market’s reaction was muted because the statement contained no shocks.