After several countries from the Europe released reports regarding their diminishing GDPs, the US Unemployment Claims and the ECB casted an even darker cloud upon their respective economies.
Just when everyone thought the number of unemployment claims settled and will start to decrease, the latest report released by the Labor Department shows otherwise. During the past week, 3.84 million people filed for unemployment. Analysts expected 3.5 million.
The good part is that the newest number is lower than the one reported for the week ended on March 28, when 6.87 million registered.
Jerome Powell, Chairman of Federal Reserve, said yesterday that the unemployment rate is likely to go higher than 10% from March’s 4.4%.
Consumer spending also dropped by 7.5%.
The European Central Bank decided today to keep the interest rate at the same level. Still, it is prepared to increase the financial aid package worth $813 billion if necessary, as the Eurozone is close to recession. The decision comes as a response to the 3.8% GDP contraction – the lowest level since 1995. The government bond purchase will continue, and adjustments will be made if necessary.
Christine Lagarde stated that ECB expects an overall GDP contraction between 5%-12% for this year.
European stocks fell after the announcement, with the Europe50 benchmark falling 0.7%.
Sources: cnbc.com, forexfactory.com, ecb.europa.eu
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