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Fewer Americans apply for unemployment benefits — Business Digest

18 Mai 2017

While the unemployment rate has been falling since 2009, many commentators and economists have raised concerns about the also falling labor force participation rate - or the percentage of adults working or looking for a job.

Initial claims for USA unemployment-insurance benefits fell sharply in the latest week signaling continued strong labor market, according to government data released Thursday. The data agency attributed the fall in the unemployment rate to 45,500 people leaving the labor force, or the biggest such decline in almost two decades.

The report adds to evidence that economic growth is rebounding in the current April-June quarter, with some economists forecasting that it could top a 3 percent annual rate, compared with the first quarter's 0.7 percent rate.

Central bank officials in this week held short-term interest rates steady, but indicated two more increases could occur later this year.

Today's figures show that the jobless rate for adult men fell three tenths to 4% but rose a tenth for women to 4.1%. The U.S. dollar initially gained against a basket of currencies before turning flat. In April, the average hourly pay increased to $26.19, marking a 2.5 percent rise compared to a year ago, but a slightly slower growth rate than in previous months.

Average hourly earnings rose seven cents, or 0.3 per cent, last month, partly because of a calendar quirk. The sector lost 32,000 jobs in the same two months past year. The better-than-expected data followed a weaker reading in March, when payroll gains were only 79,000. "If it's easier for them to get a job outside their company, they're more likely to push for higher wages".

Job growth last month was fueled by the service sector. The data are based on a monthly Current Population Survey, which calculate the veteran unemployment rate from a much smaller sample size than the overall rate. Leisure and hospitality payrolls jumped by 55,000 in April. Health care added 37,000 jobs in April and the banking industry added 19,000. It has now fallen three straight months in 2017. "Brick-and-mortar retailers cut jobs in response to withering competition from online merchants". Compared to the first quarter of 2016, productivity increased at a 1.1% rate, suggesting a gradual improvement in the productivity trend.

Other labour market measures also showed strength last month. The unemployment rate unexpectedly fell to 6.5 percent from 6.7 percent, the lowest since October 2008.

Fewer Americans apply for unemployment benefits — Business Digest