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US jobless claims hit 49-year low; labour market resilient

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WASHINGTON: The number of Americans filing applications for unemployment benefits fell to a nearly half-century low last week, pointing to sustained labour market strength despite slowing economic growth.


But the loss of momentum in activity has left some employers unsettled about the economy’s outlook. Announced job cuts by US-based companies in the first quarter were the highest since 2015, other data showed on Thursday.


Fading stimulus from a $1.5 trillion tax cut package, the United States’ trade war with China, slowing global growth and uncertainty over Britain’s exit from the European Union are casting a shadow over the economy, which in July will celebrate the longest expansion on record.


“We are at a point of inflection where the overall economic trend is changing,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “That would account for at least some of the volatility and contradictory nature of the data. It would also point to a slowdown not a crash.”


Initial claims for state unemployment benefits declined 10,000 to a seasonally adjusted 202,000 for the week ended March 30, the lowest level since early December 1969, the Labour Department said. Economists polled by Reuters had forecast claims rising to 216,000 in the latest week. The Labour Department said only claims for California were estimated.


The claims data have shown no significant pickup in layoffs and there have been reports of companies reluctant to let go of workers amid a growing shortage of skilled labour. The scarcity of workers contributed to a recent slowdown in hiring.


Job growth has slowed from last year’s roughly 223,000 average monthly pace. The pace of increase, however, remains more than sufficient to keep up with growth in the working age population, holding down the unemployment rate.


The dollar gained versus a basket of currencies. US Treasuries prices rose, while stocks on Wall Street were mixed.


The four-week moving average of initial claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 4,000 to 213,500 last week, the lowest level since early October 2018.


While the claims data has no bearing on March’s employment report, which is scheduled for release on Friday, economists said it bodes well for an anticipated rebound in job growth.


According to a Reuters survey of economists, nonfarm payrolls likely increased by 180,000 jobs last month after a meager 20,000 in February, which was also seen as pay-back after robust gains in the prior two months. The unemployment rate is forecast unchanged at 3.8 per cent.


A separate report on Thursday from global outplacement consultancy Challenger, Gray & Christmas showed planned job cuts by US-based employers dropped 21 per cent to 60,587 in March.


— Reuters


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