More on labor, the deficit, and the dollar

Jobless claims just hit, and they were essentially in line with expectations. Initial claims dipped from a revised 625,000 to 621,000 in the most recent week. Forecasts called for a reading of 620,000. However, the upward trend in continuing claims actually moderated for a change. They declined from 6.75 million to 6.735 million, the first time we haven't set a fresh record in several weeks. That was also below the forecast of 6.855 million.

Meanwhile, yesterday was a day of revenge for the dollar bulls. The dollar took off and gold fell after Fed Chairman Ben Bernanke said all the right things in an appearance before Congress. He talked a lot about the risk of rising deficits, and the need for fiscal and monetary restraint at some point. But if you believe that this "Helicopter Ben" Fed, the administration, and Congress will actually DO anything (rather than just TALK about these risks), you -- dear reader -- are far more optimistic and trusting than I am.

Or as Pimco Chief Investment Officer Bill Gross put it in his most recent monthly outlook this week:

"While policymakers, including the President and Treasury Secretary Geithner, assure voters and financial markets alike that such a path is unsustainable and that a return to fiscal conservatism is just around the recovery’s corner, it is hard to comprehend exactly how that more balanced rabbit can be pulled out of Washington’s hat."