The number of Americans filing for unemployment benefits rose from a 43-year low last week, but remained below a level that is consistent with a tightening labour market. Initial claims for state unemployment benefits increased 18,000 to a seasonally adjusted 251,000 for the week ended November 19th, the Labor Department said on Wednesday. Claims for the previous week were revised to show 2,000 fewer applications filed than previously reported.
Claims have now been below 300,000, a threshold associated with a healthy labour market, for 90 straight weeks. That is the longest run since 1970, when the labour market was much smaller.
Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 250,000 in the latest week. The claims report was released a day early because of the Thanksgiving holiday. A Labor Department analyst said there were no special factors influencing last week’s data and that no states had been estimated.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 2,000 to 251,000 last week. The strong labour market, viewed as being at or near full employment, and steadily rising inflation are expected to encourage the Federal Reserve to hike interest rates at its December 13th-14th policy meeting.
The US central bank raised its benchmark overnight interest rate last December for the first time in nearly a decade. The claims report also showed the number of people still receiving benefits after an initial week of aid rose 60,000, to 2.04 million, in the week ended November 12th.
The four-week average of the so-called continuing claims edged up 750 to 2.02 million. The continuing claims data covered the period during which the government surveyed households for November’s unemployment rate. The four-week average of continuing claims fell 26,750 between the October and November survey periods, suggesting some improvement in the unemployment rate. The jobless rate was at 4.9 per cent in October.
Meanwhile, new orders for US-manufactured capital goods rebounded in October, driven by rising demand for machinery and a range of other equipment, the latest indication of an acceleration in economic growth early in the fourth quarter.
The Commerce Department said that non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 0.4 per cent after a slightly downwardly revised 1.4 per cent decline in September. These so-called core capital goods orders were previously reported to have dropped 1.3 per cent in September. Last month's increase was in line with economists' expectations and suggested that manufacturing was slowly regaining its footing.
Business spending on equipment has declined for four straight quarters, weighing heavily on manufacturing, which accounts for 12 per cent of the US economy. With the dollar’s rally appearing to have peaked early this year and oil and gas drilling activity rising in recent months, there is cautious optimism that equipment spending will rebound in the fourth quarter.
Capital investment is also expected to pick up as some of the uncertainty surrounding the November 8th presidential election clears. President-elect Donald Trump has pledged a massive infrastructure spending programme, which could spur business investment on capital equipment.
Shipments of core capital goods rose 0.2 per cent last month after an unrevised 0.4 per cent gain in September. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.
A 12 per cent surge in demand for transportation equipment buoyed overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, which jumped 4.8 per cent last month. That was the biggest rise since October 2015 and followed a 0.4 per cent increase in September.
There were also increases in orders for fabricated metal products, electrical equipment, appliances and components, and computers and electronic products. – (Reuters)
