Higher US jobs numbers add to pressure on Fed to lift rates
The US labour market appeared to gain momentum in early September as fewer Americans filed for weekly unemployment benefits, but weak inflation pressures may complicate the Federal Reserve's decision whether to raise interest rates.
Initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 275,000 for the week ended September 5, the US Labor Department said yesterday.
It was the 27th straight week that claims remained below the 300,000 threshold, which is usually associated with a strengthening labour market. The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, ticked up 500 to 275,750 last week.
"Consistently low readings for initial and continuing jobless claims suggest that the separations side of the labour market remains healthy, and we see little reason to expect a meaningful shift in labour market dynamics in the near term," said Jesse Hurwitz, an economist at Barclays in New York. In another report, the Labor Department said import prices fell 1.8pc last month as the cost of petroleum and a range of goods dropped, after sliding 0.9pc in July.
August's drop in import prices was the largest in seven months.
It suggested that a strong dollar and soft global demand continued to put downward pressure on imported inflation. Import prices now have declined in 12 of the last 14 months.
Low inflation combined with a tightening labour market and strengthening economic growth, poses a challenge for the Fed's policy-setting committee, which meets next week. (Reuters)