US weekly jobless claims data increasing
The United States reported an increase in unemployment aid in recent weeks although the number of citizens receiving unemployment benefits fell to a 45 year low indicating the effect of tightened labour market conditions. The Department of Labor stated that the initial claims for state unemployment benefits had increased by 5,000 to a seasonal adjustment of 215,000.
Experts had predicted a rise in the figures to about 214,000. The Department of Labor also stated that Hurricane Florence had affected claims from South and North Carolina. The US labor market is assumed to be probably at full employment or even close. The unemployment rate almost at its all time (49-year) low of 3.7 percent.
Meanwhile, there are over 7 million vacant jobs in the US economy which suggests that there is a shortage of skilled workers.
While the President, Donald Trump, is making plans to impose tariffs on the imports coming from China, global trade concerns have intensified about the decision but the US financial market was less affected. The economy seems to be affected by the escalating trade war between the United States and China as well as tensions with trading partners like Mexico, European Union and Canada. Stocks on Wall Street were trading at a lower rate while the prices for the US treasuries increased.
The Federal reserve increased interest rates for the third time in the year, removing the reference to its monetary policy somehow helpful. In recent meeting among the Feds, it was accounted that they generally accepted that the labour market conditions should continue.
US unemployment rate
Prognostors are hoping that tightening labour market conditions may boost wage growth for the other half of the year in a bid to increase consumer spending’s and also boost household wealth, which was sluggish at the start of the year. The sluggish consumer spending may restrict economic growth in the first quarter although it is speculated to be better. It was reported that claims fell 1,750 between February and March, indicating additional jobs to the economy.
The economy created about 400000 jobs in February. Although not yet reflected on the claims data, there have been reports that some companies are planning job cut or laying of workers because of uncertainty caused by the Trump’s government.
It can be deducted that due to increased jobs in the economy, companies and employers are holding on to their labour at all cost resulting to a tight labour market. Earlier in the year, the Federal Housing Finance Agency (FHFA) said that house price index increased with a slight seasonal adjustment of 0.8 percent in January after a 0.4 percent increase which was reported in December.
In a survey from the Philadelphia Fed indicated that its business conditions index for the mid-Atlantic reduced from 22.9 to 22.2 despite new orders.
Also In the survey, it was gathered that employment were higher in the region and that some companies had increased their workers’ salary. The economy created about 140,000 jobs in September making it the fewest figure in the year.