Jobless-Benefit Rolls at 28-Year Low Show U.S. Labour Tightness
A decline in U.S. jobless-benefit rolls to a 28-year low adds to signs of a tight labour market, as initial unemployment claims also remained subdued, Labour Department figures showed Thursday.
The decline in jobless-benefit rolls dovetails with a drop in the unemployment rate, signalling the labour market continues to strengthen. Initial claims have been below 300,000 since early 2015, rounding out the overall picture of solid economic growth. The continued evidence of a tight labour market is supporting forecasts the Federal Reserve will raise interest rates again next month.
• Prior week’s reading was unrevised at 238,000
• The unemployment rate among people eligible for benefits was unchanged at 1.4 percent
• Louisiana was the only state with estimated claims last week
EU raises euro zone growth forecasts, sees drop in unemployment
Euro zone economic growth should grow a bit faster this year than previously believed and the unemployment rate could be the lowest in a decade, the European Commission said on Thursday. It also predicted low inflation, a challenge for the European Central Bank which is trying to boost it. The 19-country euro zone is expected to expand by 1.7 percent this year and 1.8 percent in 2018, the EU executive said, slightly raising its previous estimate for euro zone growth of 1.6 percent this year, while leaving unchanged the 2018 forecast. The projected growth for 2017, however, remains lower than 2016 when it was 1.8 percent, and further below the 2.0 percent post-crisis high reached in 2015. The Commission’s forecasts, published three times a year, predict all euro zone countries will grow this year and next, with Germany, the bloc’s largest economy, accelerating to 1.9 percent in 2018, and Spain and Portugal expanding much more than previously expected. “Europe is entering its fifth consecutive year of growth,” EU Economics Commissioner Pierre Moscovici said.
China’s factory prices slow further as manufacturing, commodities cool
China’s April producer price inflation cooled more than expected in a sign manufacturing activity may be losing momentum along with other sectors of the economy as domestic demand remains muted and the government cracks down on financial risks. Prices for raw materials fell in April from the previous month, pressured by fears that domestic demand will not be strong enough to absorb surging factory output that rose the most in more than two years in March. A renaissance in China’s steel industry has been a major driver of the world’s second-largest economy in recent quarters, helping generate the strongest profit growth in years and adding to a reflationary pulse across the global manufacturing sector. But China’s reflation cycle in producer prices has probably peaked, and will trend down further, which could drag on China’s economic growth in the second half of the year, said Betty Wang, senior China economist for ANZ in Hong Kong. “The recovery momentum in the economy that emerged in the second half of last year was mainly driven by producer price inflation rather than any changes from a fundamental perspective,” Wang said.