Oil prices are moving lower once again this morning but remain higher overall for the week. Today’s losses come as traders continue weighing faulty demand caused by lockdowns in countries like India. Traders are focusing on the economy, where the US has seen a few negative headlines despite an overall improvement since the pandemic.
April’s job report came out, showing that the US created a paltry 266,000 jobs during the month, a quarter of economist expectations. Although new unemployment claims have slowed, the overall unemployment rate ticked higher, from 6.0% to 6.1%.
Adding to the uncertainty, the Federal Reserve warned that financial markets may be rising too far, too fast. Low interest rates have pushed investors to riskier asset classes like equities and commodities to generate higher returns. Those markets have seen huge returns as a result, but the prospect of inflation and higher interest rates changes the calculation. Higher interest rates increase the appeal of risk-free and low-risk bonds, taking the focus off other financial markets. The Fed’s report noted that while the economy is currently stable, financial markets could experience “significant declines.”