Forex News: CPI higher than expectations. Initial Claims still show weakness

CPI comes in at +0.8% versus +0.4%. YoY 5.6% versus 5.1%.  Still climbing.

Jobless Claims come in at 450,000 higher that 435,000 expected.

Continuing Claims 3,417,000 versus 3,310,000.  These numbers are indicative of recessionary period.  This ultimately should help in bringing the CPI down.

Below is a chart of the Initial Claims data during the last recessionary period.  During that time, the Initial Claims had a move up over the 400,000 level and stayed above the level for an extended period.

Fast forward to today.  We have been in a 360,000 to 380,000 range for a while in Initial Claims. Now the trend has move up sharply.   It seems the last spike in the price of energy had  a pronounced influence on businesses on the margin. Suddenly, the productivity increases from cutting costs shifted to productivity gains by cutting workers and costs.  This will translate into a higher unemployment rate down the road.  From the CPI data, it also seems that businesses decided to pass on costs to consumers as well. 

The dollar should have find some resistance and should correct at least a little as a result.