San José, CA – On Thursday, January 20, the U.S. Department of Labor reported that the number of new claims for unemployment insurance rose for the second week in row, to more than 280,000 for the week of January 10-15. This is up almost 40% from the beginning of January. While much of this may be caused by the spike in COVID-19, there have been other signs of economic weakness that started to show up in December.
Signs of economic weakness and growing concerns about rising interest rates also slammed the stock market last week. For the second week in a row, stocks fell. The U.S. central bank, the Federal Reserve, has made it clear that it will raise interest rates sooner rather than later because of the rising inflation, which hit 7% year over year in December. Higher interest rates have usually been bad for stocks, especially for fast-growing companies and more speculative stocks. The technology heavy NASDAQ entered correction territory last week, falling more than 10% from its peak. More speculative financial assets like Bitcoin and other cryptocurrencies were slammed, with Bitcoin continuing to drop and ending the week down almost 50% from its record high.