Today’s Economic Shakers

U.S. unemployment claims sink to lowest in 5 weeks…

The latest jobs numbers from out of Washington show that the economy remains robust, based on the most recent week’s unemployment claims filings.

The Labor Department reported its weekly initial jobless claims data early on Thursday, showing that the number of those filing for unemployment benefits for the first time fell to 234,000, a drop of 25,000 from the previous week.

Economists had forecast a drop of jobless claims down to 250,000, so the actual decline was a strong beat compared to those analysts surveyed, according to a MarketWatch poll.

The government data showed that the level of new claims fell to the lowest level since the end of February of this year.

The report also showed that, on a weekly basis, it was the largest drop in jobless claims since April 2015.

Additionally, the Labor Department report revealed that there was a strong decline in those receiving jobless benefits on an ongoing basis, falling to 2.03 million and reflecting a decrease of 24,000 in that category.

The report also highlighted the fact that new jobless claims have remained below the benchmark level of 300,00, a key metric that indicates a strong labor market, for 109 consecutive weeks.

The current unemployment rate is now down to 4.7%, supporting further rate cuts by the Fed, based on its target for the jobs market.

All told, almost 500,000 new jobs have been added to the economy in January and February, according to government data.

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The Fed wants to start shrinking its bloated balance sheet, according to March FOMC minutes…

The Federal Reserve seemed to catch the market slightly off guard yesterday, as the tone of its March Federal Open Market Committee (FOMC) minutes caused equities to sell off at the end of the session.

Minutes of last month’s FOMC meeting, which referenced the Fed’s March interest rate hike, also included comments that revealed that the majority of its members favored efforts to reduce its balance sheet, which currently stands at $4.5 trillion.

The massive amount on the central bank’s balance sheet is the result of its recent intensive stimulus measures, referred to as quantitative easing. The expansionary monetary policy was originally implemented following the crash of 2008, and has continued on in one form or another through 2016.

Comments by the Fed officers that comprise the FOMC indicated that the majority of its members are looking to normalize the nation’s monetary policies, which have been expanded to include a drop of interest rates down to near-zero levels for several years.

The Fed’s move to raise interest rates in March was expected by virtually all economists polled prior to the move, and therefore the boost of 0.25% by the central bank failed to move the markets when announced last month.

However, the fact that the minutes highlighted the Fed’s intentions to shift away from easy monetary policies back towards what is considered to be a more normalized approach was enough to knock down the key equity indices by almost 1%, reversing gains made during the course of the bulk of Wednesday’s session.