U. S. work market firming despite anemic economic growth

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Source:   —  April 07, 2016, at 6:18 PM

Initial claims for state unemployment benefits declined 9.000 to a seasonally adjusted 267.000 for the week ended April two, the Work Dept said on Thursday.

The no of Americans filing for unemployment benefits fell more than expected latest week, suggesting the work market continued to strengthen despite lukewarm economic growth. Initial claims for state unemployment benefits declined 9.000 to a seasonally adjusted 267.000 for the week ended April two, the Work Dept said on Thursday.

"The persistently low level of claims should allow some reassurance that the economy is growing, even if that growth appears more sluggish that most would've hoped a few months ago," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

Economists had forecast claims slipping to 270.000 in the latest week. Jobless claims have presently been below 300.000, a threshold associated with healthy work market conditions, for fifty-seven weeks, the longest stretch since 1973.

The work market buoyancy is at odds with slowing economic growth. Recent data on consumer spending, business investment and international trade propose growth slowed to below a one % annualized rate in the first quarter after expanding at an anemic 1.4 % pace in the fourth quarter.

With the strengthening work market drawing in discouraged and new work seekers, which is likely to hold wage growth moderate, it's unlikely the Federal Reserve will shift from its policy of gradually raising interest rates.

The dollar was small changed against a basket of currencies after the claims data. U. S. stocks were trading lower, tracking falling oil prices, while U. S. Treasury debt prices rose.

MORE WORK SEEKERS

Government data latest week showed about 2.4 million people entered or re-entered the work market between Sept and March, the second-largest expand in the work force over a six-month period on record. Fed Chair Janet Yellen has argued that hidden work market slack was restraining wage growth.

Fed executive latest mo downgraded their economic growth expectations and forecast only two more rate rises this year. The U. S. central bank raised its benchmark overnight interest rate in December for the first time in nearly a decade.

Minutes of the Fed'south March 15-16 policy meeting published on Wednesday suggested the central bank was unlikely to hike rates before June.

Latest week, the four-week emotional average of claims, considered a better measure of work market trends as it irons out week-to-week volatility, rose 3.500 to 266.750.

"The work market is on a solid footing. Layoffs are low, hiring is good, and workers who do lose their jobs are finding new ones quickly," said Gus Faucher, deputy chief economist at PNC Financial in Pittsburgh.

Employers added 215.000 jobs in March, on top of the 245.000 positions created in February, the government reported latest week. An expand in the work force lifted the unemployment rate one-tenth of a percentage point to five percent.

A report on Tuesday showed hiring by U. S. employers surged in Feb to the highest level since November two thousand six. Nearly three million people voluntarily quit their jobs in February.

"The fears of world economic growth (slowing) aren't causing a concern for business owners here in the U. S. with all the assistance wanted signs up in the windows," said Chris Rupkey, chief economist at MUFG Union Bank in New York.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

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