The number of people filing for unemployment benefits in the United States rose to 233,000 last week, an increase of 5,000 from a week ago. However, economists point out that this is not a bad sign as it is still within the range of what would be expected in a healthy economy. In fact, jobless claims have been low throughout this economic recovery and near-record lows in the past several months.
Labour market conditions continue to tighten, with the U.S. Department of Labor reporting that there were 233,000 initial applications received for unemployment insurance last week, up by 5,000 from the previous week’s unrevised level of 228,000. This suggests little improvement in the labour market over recent weeks.
In fact, claims have been below 300,000 on a year-to-year basis for 95 consecutive weeks and have remained consistently low in recent months. Initial claims have been below 300,000 since March 2015 and have remained below that level for 76 consecutive weeks. Over the past 12 months, initial claims have averaged 212,000.
The low level of jobless claims is a sign of labour market strength. Jobless claims at this point in the economic expansion are typically low, but they are even lower than usual right now. This suggests that hiring is strong and that layoffs remain rare.
Low Layoffs
The number of people who are actually being laid off and collecting unemployment benefits is extremely low by historical standards. In fact, the number of people who are collecting unemployment benefits is the lowest it has been since 1973, nearly 50 years ago. This suggests that job security is relatively high right now.
Large companies have been laying off fewer workers than they have in many years, and small companies are even more reluctant to fire any of their employees. This is a sign that many businesses are facing very little competition for skilled workers due to such low hiring.
Large companies have also been hiring more workers than they were a year ago, and small companies continue to hire. The number of unemployed people applying for unemployment benefits has remained steady at about 2 million over the past year, which is good news as it suggests that people are confident enough in the economy to look for work even though they don’t currently need to take it.
Weekly US unemployment claims rise as job market softens
The number of Americans who applied for unemployment benefits last week rose less than expected, but the increase suggested job market conditions may be softening after a recent run of strong employment gains. Initial claims for state unemployment benefits increased by 8,000 to a seasonally adjusted 234,000 for the week ended May 25, the Labor Department said. Data for the prior week was unrevised. Claims have now held below 300,000 on a year-to-year basis for 88 consecutive weeks, the longest stretch since 1970.
The latest round of weak claims data – which even Mr. Trump’s supporters acknowledge could be better – is unlikely to change anyone’s mind in the White House, where aides remain concerned about their efforts to pass a bill dismantling President Barack Obama’s health-care law will fail. The president has been vocal about his disapproval for Democrats for not supporting the health bill, and said last week on CBS News that “we are having no support from the Democrats, and that’s too bad…
Trade deficit comes off record high
The trade deficit declined slightly in March, but the overall strength of the economy—including strong consumer spending—helped push imports to a record high. The U.S. trade deficit fell 3% to $48.6 billion in March, according to a Commerce Department report released Friday. This was slightly better than economists expected, although the trade gap widened by nearly 7% year-over-year due to rising demand for foreign goods and an increase in exports of U.S.-made products like crude oil and commercial aircrafts.
Those who were granted benefits had been unemployed an average of 22.1 weeks, down from 22.8 the previous week, the Labor Department said. The four-week moving average, a less volatile measure than the weekly figure, dropped to a seasonally adjusted 1.972 million from 2.038 million in the prior week. That’s the lowest level since May 2007 when it was 1.951 million, according to data provided by Moody’s Analytics.
U.S. weekly jobless claims increase; layoffs fall in July
U.S. jobless claims rose last week, but indications of job market strength continued with lower layoffs and fewer people exiting the labour force. The number of Americans filing for unemployment benefits increased by 6,000 to 224,000 which is the highest level since October 26th last year when it stood at 230,000 and was attributed to Hurricane Michael’s aftermath. The four-week moving average came in at 220,000 which is also the highest level since October 2017 when it stood at 208,000 as well.
The increase comes as a shock to analysts who had predicted unemployment claims to remain near record lows which were set in August. The four-week average hit the lowest level since 1969 recently yet another example of the strength of the labor market and how little pressure is being felt by businesses in this environment.
Jobless claims rise to 260,000 ahead of U.S. jobs
Job cuts in the U.S. climbed to an almost three-year high in May with more than a third of the layoff announcements coming from manufacturing, as companies increasingly struggle to keep up with demand. Deloitte announced plans last week to cut 15,000 jobs, while automaker General Motors said it would eliminate one plant and trim another as it tries to save US$6 billion by year-end.
The U.S. unemployment rate ticked up to a 10-year high of 3.6% in March, as the economy continued to create more jobs than it lost but workers left the labour force in greater numbers, according to a government report released Friday. The jobless rate, the lowest since 1969, had fallen for a four-straight month, but the increase in hiring made it rise again. The total number of people registering for unemployment benefits during the period rose by 7,000 to 1.8 million.
The labor force participation rate rose to 62.9% from 62. 7% in February. The elevated jobless rate reflected that more people came back into the labor force to look for work and more jobs were available. While the unemployment rate is on the rise it is still far lower than previous high levels which are attributed by economists to the lack of private-sector hiring in this environment.
US jobless claims hit a six-month high as labour demand cools
Jobless claims rose to a six-month high in the first week of August, pointing to cooling labour demand as companies hunker down in the face of an economic slowdown. U.S. initial jobless claims climbed by 9,000 to 261,000, a Labor Department report showed Thursday. Economists surveyed by Bloomberg had forecast a reading of 245,000.
The four-week moving average, a less volatile measure than the weekly figure, dropped to 285,000 from 292,000. The rise in claims was the largest in six months and extended a prolonged climb that began at the end of last year and has coincided with disappointing quarterly economic reports from manufacturers. The claims report also showed that about 54% of the claims for unemployment aid filed between mid-April and late June were for people who began looking for work within the past week.
A read on the job market is collecting from a survey from CNBC, which showed that those working in professional and business services cut the most jobs in May, shedding a net 1,000 workers. Those in manufacturing and information technology also reported large cuts. Other sectors saw little change. Employment grew by 176,000 jobs to 17.050 million workers in May.
US economy contracts again in second quarter; jobless claims fall
The US economy shrank at a much slower pace in the second quarter than previously estimated. The Commerce Department on Thursday revised down its initial reading of a 0.2% decline to show gross domestic product actually fell by 0.1% instead. Economists polled by Reuters had expected that the economy would grow at a seasonally adjusted 1%.
During the first quarter, GDP contracted by just 0.2%, which was better than last year’s first-quarter contraction of 1.1%. The second-quarter contraction in the current year was due to a slowdown in consumer spending, exports and government spending, the Commerce Department said.
The U.S unemployment rate fell to 4% in June, beating market expectations as the number of Americans filing for unemployment benefits hit a 44-year low. The labour department report showed that first-time applications for jobless aid were at their lowest since December 1973. US durable goods orders rise in June, but hints of slowing growth, 2022.
Durable goods orders rose in June, but the latest data signal that an economic slowdown is starting to take hold. Orders for aircraft, furniture and appliances all rose in June. Business spending continues to be supported by overseas demand as well as by low unemployment and household spending. The latest data suggests that economic activity slowed in the second quarter and will continue to slow.
US jobs data disappoints as shutdown impacts growth
The US economy underperformed expectations in the April-June quarter and the financial market suffered the first test of a Trump administration shutdown amid the longest lapse in federal funding since 1995. The economy grew at an annual pace of around 0.8% and unemployment fell to 3%, after being stuck at 3.8% for almost two years.
The unemployment rate was 4% in June, lower than the 4.1% forecast. The jobless rate had fallen 0.3 percentage points over the previous six months and has now dropped 0.8 percentage point since early 2018. The strong employment report follows a government shutdown that started on January 20 and furloughed 876,000 federal employees on furlough or working without pay days 2–16 of the shutdown.
Futures steady after rally with all eyes on labor market data
The labor market continued to show strength in July, as jobless claims fell to a near 44-year low and the unemployment rate held steady. The number of people filing for unemployment benefits fell by 25,000 last week to its lowest level since December 1973. The jobless rate was 4.0%, not far above the 3.8% predicted by economists before the data was released.
The data was the last major economic report for investors to scrutinize before the jobs numbers on Friday. The unemployment rate, which is near a 49-year low, has been a major driver of the gains in stocks since early March. Futures edged up after a mixed session on Wall Street.
In 2017, the economy grew at a rate of 2.3%. The unemployment rate was 4.2%, and the average duration of unemployment was 11.8 weeks; these are both significantly better than in 2016 and 2015 when job growth was slow and unemployment was higher. The economy grew at an annual rate of 2.6% in the first quarter of 2018 according to the Bureau of Economic Analysis (BEA).
US employers add 293,000 jobs in July; the unemployment rate holds
The US added 293,000 jobs in July and the unemployment rate held steady at 3.8%. The US economy added 0.2% of payrolls in July to reach a record high level of 195 million jobs. This is the 143rd consecutive month of job growth under 3%. The unemployment rate was 3.8%, not far above the 3.
The growth of the federal budget’s deficit has increased substantially due to the tax cuts and a large increase in spending agreed to in early 2018. The deficit was projected to grow from $665 billion in fiscal year 2017 (October 1, 2016 – September 30, 2017) to $804 billion in FY2018 (October 1, 2017 – September 30, 2018). Tax revenues from corporations declined in April and May but rose above their levels from May 2017 according to figures released by the Internal Revenue Service on Monday.
U.S. unemployment rate drops to 3.9%, jobless claims tumble
The U.S. jobless rate fell below 4% for the first time since December 2000 and tumbled to 3. 9% in November as employers added a robust 313,000 jobs in a sign of the economy’s resiliency. The unemployment rate dropped from an 18-year low of 4.1% in October, when employers added 261,000 jobs for the month. It was the lowest read since December 2000.
The economy has added 138,000 jobs per month on average over the past year, down from 187,000 over the previous 12 months and well below the monthly average of 180,000 in 2016. However, hiring is still stronger than the average monthly gains of 81,000 in 2013 and 2014 before the 2016 election when the labor market reached its net employment low. The unemployment rate fell in October to 4.1% from 4.3% in September as hiring grew at a faster pace.
Conclusion
The economic and financial market outlook for the next one year is quite positive, as we believe that the tax reform legislation will bring about deficit reduction, which is a step to achieve more sustainable growth in our economy. While reviewing the U.S gross domestic product history from the years 1921–2017, we can see there are two periods of exceptional growth.
The first period (1921–1929) was during World War I, when deaths caused by the war killed millions of Americans and Europe as a whole had a much lower GDP. The second period (since 1945) is after the war, when the economic growth was higher than expected. In fact, before World War II, the average annual rate of growth of GDP from 1921–1945 was 1.34%. The economic recovery from the Great Depression lasted until 1962, when the U.S economy expanded by 4.
The second period (since 1945) is after the war, when the economic expansion was higher than expected. Income per capita has grown continuously in the period since, although there are cyclical fluctuations. The average annual growth rate of real income per capita was 2.05% in this period, a record that probably will not be approached again.
The economy had recovered from the recession started in 2008 and GDP has been growing at a steady pace since 2010. The trend of GDP growth continued in 2017 and 2018, with the average annual rate of 3%. An important concern for financial markets is that the current cyclical upswing could create an inflationary situation, which would lead to interest rate increases.
There are several reasons why we can expect the economy to grow in 2019 at a higher rate than in 2018, which will affect stock prices. First, tax cuts will likely boost the economy and generate higher GDP growth. The second reason is that corporate investment is expected to increase after improving liquidity conditions, which could give a boost to stock prices as well. Third, with better leverage for high-income US households, the US dollar will tend to strengthen against most major world currencies.
Market Data: Markets are currently anticipating that the Fed will hike rates at their December meeting. However, this doesn’t necessarily mean they will do so. The public is generally optimistic regarding the economy and consumer spending continues to be strong, although stock markets are trading near record peaks. The yield on the 10-year Treasury note fell to 2.05% at year-end 2017 and rose to 2.28% this year.
Earnings season is off to a strong start with major corporations reporting significant positive results in most sectors. The S&P 500 Index gained 5.55% and the S&P 500 Index gained 1.76% during the third quarter of 2018 due to these positive results. Earnings reports for the third quarter will be released in mid-November and this can cause sharp market movements as more investors anticipate these events.
edited and proofread by nikita sharma
