Labor Market Strong as Dollar Slides with North Korean Tension
August 11, 2017
Jobless claims rose last month, despite still being well below the measure for a healthy labor market. Insurance companies are asking for rate hikes from the government due to Obamacare uncertainty caused by the President. The dollar is sliding as President Trump continues to stoke fears of conflict.
- Insurers request Obamacare rate hikes amid uncertainty, confusion. Insurance providers are due to file rate increases for 2018 with states this month, but uncertainty over the Trump administration’s plans with the controversial law has led to larger than expected increases. A study by the Kaiser Family Foundation concluded that the uncertainty of the law’s implementation would lead to much higher than expected premium increases, and could potentially cause some insurers to exit the exchanges. Specifically, the study cited concerns that the administration might choose to not enforce the individual mandate, making for sicker risk pools, or will halt the subsidy payments it makes to insurers, leading to hike rates to cover costs. While Obamacare’s individual subsidies will likely cover the rate increases for most low and middle income participants, concerns that the confusion could lead more insurers to exit the market could leave some counties entirely without coverage options. [The Hill]
Economic Indicators & News
- Jobless claims rise unexpectedly, labor market still tight. Claims for state unemployment rose by 3000 to 244,000 jobless claims last week, the Labor Department announced today. While the increase was unexpected, the labor market is operating at near full employment- further declines in jobless claims are unlikely. This is the country’s 127th straight month of jobless claims below 300,000—a measure of a healthy economy, and the longest stretch since 1970, when the labor market had fewer participants. July’s “banner” jobs report indicated that the economy added almost 1.3 million jobs this year, bringing unemployment down five tenths of a percent. [Reuters]
- Dollar slides on North Korea tensions. As North Korea tensions boil, the dollar slid to an 8-week low against the yen and the Swiss franc. This trend came after escalating rhetoric between President Trump and North Korea. The yen, considered an ideal currency to hold in mounting geopolitical tensions, is considered safe due to Japan’s high foreign debt holding, which might be repatriated in times of crisis. The dollar also weakened after U.S. produce prices fell unexpectedly in July, further underscoring concerns that the Fed has been unable to meet its inflation targets, putting a rate increase at risk. [Reuters]