More than 2 million unemployed Americans are at risk of losing their jobless benefits over the next three months. That threatens to undermine the unemployment rate as an anchor for future Federal Reserve action.
The jobless rate dropped to a five- year low of 7 percent in November as American employers added more workers than forecast, boosting speculation the Federal Reserve may start scaling back stimulus as soon as this month.
The U.S. economy expanded more in the third quarter than initially estimated as unsold merchandise piled up at the fastest rate since early 1998, setting the stage for a possible slowdown in the final three months of the year.
Data this week will probably highlight a divergence in global growth. Employers in the U.S. hired more workers in November, and the government in the U.K. may raise its economic forecast for the first time in three years. Conversely, Brazil’s economy may have contracted in the third quarter for the first time in two years.
Coming up in the global economy this week are readings on inflation in the U.K. and growth in the euro region, the third Communist Party plenary session in China and retail sales in Brazil. In the U.S., Janet Yellen’s confirmation hearing in her bid to become the next chairman of the Federal Reserve will take center stage.