Last week the amount of Americans that ﬁled for unemployment beneﬁts was less than anticipated. It rebounded from a 45-year low, but this pointed out the tightening labor market conditions.
According to The Labor Department, there was an increase of initial claims for state unemployment beneﬁts to 17,000 to a seasonally revised 233,000 for the week. In the prior week, claims fell to 216,000, and this is the lowest level since January 1973.
In the latest week, economists had forecast claims that rose to 240,000. There has been difﬁculty adjusting the data for seasonal ﬂuctuations at the end of 2017 and the start of 2018. This has caused claims to be volatile recently. The unexpectedly cold temperatures have also has also affected the data.
According to The Labor Department, claims for Maine have been estimated. After territories were destroyed by Hurricanes Irma and Maria, claims-taking procedures have still not returned to normal in Puerto Rico and the Virgin Islands.
Claims last week remained below the 300,000 threshold, and this has been the case for the last 151 weeks. This can be associated with a strong labor market because there hasn’t been a stretch like this since 1970, and labor markets were much smaller then.
John Ryding, who holds the position has chief economist at RDQ Economics in New York, made a statement, “The song remains the same for tightness of the labor market – employers are extremely reluctant to ﬁre current workers, which reﬂects not only the current positive business environment but also the difﬁculty in ﬁnding qualiﬁed replacements.”
THE HERALD FINANCE REPORT
Start your workday the right way with the news that matters most.
U.S. stock index futures have been higher while the prices of U.S. Treasuries were trading weaker. Also the U.S. dollar hadn’t been changed against a basket of currencies after the data.
The jobless rate is at a low, in the last 17 years, of 4.1 percent. This means that the labor market is near full employment. The Four-week moving average of initial claims has been considered a better measure of labor market trends in this last week. It ironed out week-to-week volatility as it fell 3,500 to 240,000.
In the week of January 13th, the claims report has showed the number of people that were receiving beneﬁts after an initial week of aid dropped 28,000 to 1.94 million. These so-called continuing claims and their four-week moving average have fallen 3,500 to 1.92 million.
Janurary’s unemployment rate will be calculated by the continuing claims data that covered the week of the household survery. Between December and January survey periods, the four-week average of continuing claims had slipped 1,750.
The unemployment rate this month has suggested little change. Companies are competing for workers and this will allow for faster wage growth. Economists expect the jobless rate to hit 3.5 percent by the end of 2018, and the rate dropped seven-tenths of a percentage point last year in 2017.
The federal reserve is likely to raise interest rates a bit more intensely than currently anticipated because of the strong wage inﬂation. Borrowing costs have increased by three times in 2017 because the U.S. central bank has forecast three rate hikes this year.
Chris Rupkey, chief economist at MUFG in New York, made a statement saying, “The Fed may have to pick up its game this year and raise rates four times, not just the three they have already forecast.”