U.S. jobless claims fall, continuing claims hit 17-year low
New applications for U.S. jobless benefits fell more than expected last week and the number of Americans on unemployment rolls hit a 17-year low, pointing to a tightening labour market that could encourage the Federal Reserve to raise interest rates next month. Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 238,000 for the week ended April 29, the Labour Department said on Thursday. The decline unwound most of the prior two weeks’ increases in applications. Economists say claims were distorted in recent weeks by the Easter holidays and spring breaks, which occur at different dates every year, making it difficult to strip the seasonal fluctuations from the data. Claims have now been below 300,000, a threshold associated with a healthy labour market, for 113 straight weeks. That is the longest such stretch since 1970, when the labour market was smaller. The labour market is close to full employment, with the unemployment rate at a near 10-year low of 4.5 percent.
U.S. Productivity Falls by Most in a Year; Labour Costs Climb
U.S. worker productivity declined in the first quarter by the most in a year as growth in the world’s largest economy weakened, a Labour Department report showed Thursday.
The measure of employee output per hour decreased at a 0.6 percent annual rate (forecast was a 0.1 percent decline) after a revised 1.8 percent gain in the prior three months
Expenses per worker rose at a 3 percent pace (forecast was 2.7 percent increase) after a revised 1.3 percent gain
The results reflect the first-quarter slowdown in the economy, which grew at the slowest pace in three years while the job market remained solid. The report underscores the challenge of achieving a sustained acceleration in productivity, which has been elusive through most of this expansion. As wages remained weak in recent years, businesses relied on new hires rather than more investment in efficiency-boosting technology, though that trend may change eventually as weak productivity erodes profits.
Euro zone businesses race into second-quarter on six-year high
Euro zone businesses raced into the second quarter, increasing activity at the fastest rate in six years in April, according to a survey on Thursday which suggested the bloc’s economic recovery is broadly based and sustainable. Activity expanded slightly faster than initially thought, and survey compiler IHS Markit said the data was consistent with a GDP growth rate of 0.7 percent. Official data last Friday showed the bloc far outpaced the U.S. economy in the first quarter of the year. IHS Markit’s final Composite Purchasing Managers’ Index (PMI), regarded as a good guide to growth, rose to a six-year high of 56.8 in April from March’s 56.4. An earlier flash reading had suggested a slightly shallower rise in activity.
China stocks close at 3-month lows after slower service sector activity
China stocks extended losses on Thursday to close at three-month lows, after a survey showing softer services sector activity raised concerns over growing economic risks. The blue-chip CSI300 index fell 0.3 percent, to 3,404.39 points, while the Shanghai Composite Index also closed down 0.3 percent at 3,127.37 points. Growth in China’s services sector cooled to its slowest in almost a year in April as fears of slower economic growth dented business confidence, even as cost pressures eased, a private survey showed on Thursday.