US jobless claims fall but economy could "slide into recession"

Markets were mixed on Thursday.

Asia kicked off the day positively with the Nikkei 225 rising 0.5 percent and the Hang Seng up 0.7 percent.

However, the STOXX Europe 600 fell 0.4 percent and the S&P 500 finished flat.

A report on Thursday showed that initial claims for unemployment benefits in the US fell by 5,000 to 249,000 last week, pushing the four-week average down 2,500 to 253,500, the lowest since December 1973.

While the report suggests that the US economy remains resilient, Karyn Cavanaugh, senior market strategist at Voya Financial, thinks that “there is trepidation among investors because of the writing on the wall for a December rate increase”.

On the other hand, some economists think that 2016 could be the worst year of growth since the 2009 recession. CNN reports that Oxford Economics expects the US economy to grow 1.5 percent while Fitch Ratings forecasts a growth rate of just 1.4 percent.

Lindsey Piegza, chief economist at Stifel, thinks that the US will “just slowly slide into recession over the next couple of years”.