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Geopolitical concerns overshadow strong labor market data

President Trump's decision to withdraw from the Iran nuclear deal dominated headlines this week, overshadowing a relatively robust series of economic releases and strong corporate earnings reports.  Bond yields peaked mid-week, with the 10-year Treasury note briefly breaching the 3% threshold once again.  Yields retreated later in the week, partially as a result of Thursday's CPI release.  That report indicated that core inflation rose at a 2.1% annual rate during the month of April, which was just shy of the market's expectation of a 2.2% increase.  The lack of inflation pressures indicate that the Federal Reserve won't be compelled to raise rates faster. 

Also on Thursday, the weekly initial jobless claims report demonstrated the continuing strength in the labor market, as just 211,000 people made initial filings for state unemployment benefits during the prior week.  This continues a remarkable trend of claims numbers not seen since the early 1970's, a fact that is made even more notable considering that the U.S. labor force is nearly twice as big as it was in 1970.

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