US jobless claims consistent with economic growth

The data suggests points to some underlying momentum in the economy despite a surprise contraction in gross domestic product during the fourth quarter, which largely came from temporary factors.

Last week, initial claims for state unemployment benefits increased 38,000 to 368,000, the Labor Department said on Thursday.

The increase follows a week where new claims were at their lowest in five years and still points to an economy where employers are adding jobs, albeit at a lackluster pace.

“It's still consistent with modest employment growth,” said Sam Bullard, an economist at Wells Fargo Securities in Charlotte, North Carolina.

Economists polled by Reuters had expected claims to increase to 350,000.

Claims have been very volatile this month, dropping sharply in the week ended Jan. 12 and maintaining the trend in the following week. That was largely because the model used by the department to smooth out the seasonal variations has been unusually generous during the first three weeks of January.

The four-week moving average for new claims, a better measure of labor market trends, gained 250 to 352,000, suggesting a steady improvement in labor market conditions.

Last week's claims data has no bearing on January's employment report, which is scheduled for release on Friday, as it falls outside the survey period.

Employers are expected to have added 160,000 jobs to their payrolls in January after an increase of 155,000 in December. The unemployment rate is seen holding steady at 7.8 percent.

US Incomes Rise 2.6 Percent

In a separate report, the Commerce Department said American incomes rose 2.6 percent last month. That was the biggest increase since December 2004 and well above analysts' expectations for a 0.8 percent gain.

However, much of the increases in personal incomes over the last two months have been due to special dividends and accelerated bonuses to beat tax increases that were due to begin this month.

The big rise in incomes suggests total consumer spending power entered the new year on a stronger footing, even if the gains may not have been distributed evenly throughout the workforce.

After-tax income climbed 2.7 percent in December, the strongest since May 2008, while consumer spending rose 0.2 percent, just below the pace expected by analysts in a Reuters poll.

Excluding the one-time factors that boosted incomes in December, after-tax income rose 0.4 percent.

Planned layoffs at U.S. firms fell in December for the first time in four months, while the overall job-cut total in 2012 was the lowest since 1997, a third report showed on Thursday.

Employers announced 32,556 job cuts last month, the second lowest monthly total of 2012 and down 43 percent from 57,081 in November, according to the report from consultants Challenger, Gray & Christmas, Inc.

U.S. consumers held tight to their wallets in December, despite a rise in incomes, according to Commerce Department data released Thursday.

Household spending edged up 0.2 percent from November, only half the growth of the prior month and slightly below the consensus estimate of 0.3 percent.

SHARE CLOSE
Blogger		Google+
Live Journal		Plurk
Stumble Upon

Tweet

	PREVIOUS ARTICLE
	GDP growth forecast for 2013 raised to 3.53 percent: DGBAS

NEXT ARTICLE
Tibetan burning 'inciters' guilty of murder: China

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

 Receive China Post promos
 Respond to this email

Submit