A proxy for layoffs across the USA pointed to one of the healthiest labor markets in decades, as the number of US workers who applied for new unemployment benefits declined to the lowest level since the early 1970s.
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Meanwhile, traders largely shrugged off a separate report from the Philadelphia Federal Reserve showing an unexpected contraction in regional manufacturing activity.
America’s job market keeps picking up momentum. “We assume the labor market will continue to outperform most measures”. Jobless claims entered 2016 near these historic lows but have fallen slightly.
Figures released Thursday by the U.S. Labor Department reveal initial claims fell by 6,000 to 247,000 in the seven days ended April 16, the the lowest level since the week of November 24, 1973, when Watergate was the top news item.
Economists’ estimates in the Bloomberg survey for weekly jobless claims ranged from 245,000 to 285,000. The four-week moving average for claims was 260,500, a decrease of 4,500 from the previous week’s total of 265,000. Labor market strength comes despite signs that growth stumbled in the first quarter. Lower oil prices are also a constraint, as they have undercut the profits of energy firms, forcing them to slash spending on capital projects. Many analysts are forecasting sluggish growth of less than 1 per cent annualized during the first three months of the year, as stock markets and the broader global economy turned volatile. The economy grew at a 1.4 percent rate in the fourth quarter. A large majority of economists surveyed by The Wall Street Journal expect the Fed to hold its benchmark interest rate steady at the meeting.
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The claims report covered the survey week for April nonfarm payrolls.
