Thursday 18 July 2019

Jobless claims in US at lowest level since 2007

Job seekers fill out application forms while waiting in line at a hiring event in San Francisco.
Job seekers fill out application forms while waiting in line at a hiring event in San Francisco.

Shobhana Chandra

THE smallest number of workers in more than five years applied for US unemployment benefits over the past month, indicating the labour market continues to improve.

The number of claims in the month ended August 17 declined to 330,500 a week on average, the least since November 2007, a Labour Department report showed. Compared with a week earlier, claims rose by 13,000 to 336,000, in line with market forecasts.

Firings are waning as employers hold on to workers to meet sales, which may be a precursor to bigger gains in payrolls once the effects of federal budget cuts and higher payroll taxes fade in the second half of 2013. Growth in employment, along with rising incomes, will help buoy consumer confidence and spending, which accounts for about 70pc of the economy.

There is "legitimate improvement in the labour market", said Ryan Sweet, a senior economist at Moody's Analytics. "It's more important to put the emphasis on the trend in claims, which remains favourable."

No states were estimated last week and there was nothing unusual with the data, a Labour Department spokesman said.

Last week included the 12th of the month, which coincides with the period the department surveys employers to calculate monthly payroll data.

BENEFITS

The four-week average was down from the 346,500 average during the comparable period in July. The employment report for August will be released on September 6.

The number of people continuing to receive jobless benefits increased by 29,000 to three million in the week ended August 10. The continuing claims figure does not include the number receiving extended benefits under federal programmes. Federal Reserve officials are watching the job market along with other economic data to determine when to begin scaling back the central bank's $85bn (€63.6bn) in monthly bond purchases.

In July, policy makers affirmed a pledge to continue the purchase programme until they saw signs the outlook for the jobs market had "improved substantially".

Minutes of the Fed's meeting, released on Wednesday, showed officials were "broadly comfortable" with Chairman Ben Bernanke's plan to start the so-called tapering later this year if the economy improves, with a few saying the reduction might be needed soon.

The trimming will probably begin at the Fed's September 17-18 meeting. (Bloomberg)

Irish Independent

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