The case for deflation retreated a bit today with this morning’s update of weekly jobless claims. New filings for unemployment benefits slumped by a tidy 21,000 last week to 454,000, the government reported. That’s the biggest weekly drop since mid-April and the decline represents a tactical victory for the bulls. But until and if the trend rolls on it’s only marginally encouraging. The strategic outlook, in other words, is still up for grabs.
Daily Archives: July 8, 2010
THE MAIN EVENT
Yesterday’s sharp rally in the stock market takes the edge off of deflation concerns…for the moment. But let’s not forget that the Treasury market’s implied 10-year inflation forecast is still bouncing around at the lowest levels since last October. In other words, yesterday’s revival of bullish spirits in equities didn’t pare deflationary anxiety, at least not yet.