US jobless claims fall to 14-year low as labour market recovery accelerates
The number of Americans filing for first-time unemployment benefits declined last week to the lowest level in 14 years, raising optimism about the US economy amid growing concerns about a global downturn.
US jobless claims declined 23,000 to 302,000 last week, the Labor Department reported today in Washington. That was the lowest level since April 15, 2000. The median estimate of economists called for new jobless applications to rise to 290,000 in the week ended October 11.
The less volatile four-week average declined to 283,500 from the previous week’s 287,750, the lowest level since June 10, 2000.
Weekly jobless claims track the number of Americans filing first-time claims for unemployment benefits. The indicator is used to gauge current trends in the labour market. A drop in claims is generally associated with stronger hiring trends. Fewer jobless claims suggest employers are retaining more staff to meet demand.
The number of Americans continuing to receive jobless benefits rose unexpectedly in the week ended October 4. Continuing jobless claims edged up 7,000 to 2.39 million, official data showed.
Increased staff retention generally coincides with better hiring conditions, a trend that has defined the US labour market this year. The economy added 248,000 workers in September, as the unemployment rate dropped 0.2 percentage points to 5.9 percent, the lowest since 2008.
August nonfarm payroll gains were revised up to 180,000 after an initial reading of 142,000.
Employers have added an average of 213,000 workers to payrolls in the last 12 months. September marked the seventh time in eight months jobs growth was above the 200,000 mark.
Strong labour market data could extinguish fears the US economy was beginning to soften at the end of the third quarter. However, subdued earnings growth continues to dampen the outlook on a bigger consumer-led recovery, as more Americans find themselves on the lower end of the income strata. Average hourly earnings were flat in September, raising concerns about the quality of jobs being created in the economy.
Weak earnings growth has been partially blamed for shaky consumer demand. Earlier this week the US government said retail and food sales declined unexpectedly in September. Retail sales declined 0.2 percent, the Commerce Department said on Wednesday.
Additionally, the Federal Reserve has cautioned that global headwinds could harm the US recovery, which still has a ways to go before becoming fully self-sustaining. The International Monetary Fund last week downgraded its outlook on the global economy, citing sustained pressures in advanced and emerging economies.
The international lending institution said global growth was “weak and uneven,” as it cut its 2014 outlook to 3.3 percent from 3.4 percent and revised its 2015 growth forecast to 3.8 percent from 4 percent.
The IMF boosted its outlook on the United States this year to 2.2 percent from 1.7 percent after the economy accelerated in the second quarter. The international institution expects US growth to average 3.1 percent in 2015, unchanged from its previous forecast.
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