April 15, 2021

Economy Is Showing New Signs of Strength

On Thursday, reports showed that services companies were increasing hiring and that fewer people were applying for unemployment benefits. That data followed reports of stronger auto sales and faster expansion by American factories. A report is due Friday on job growth in August. This year’s job growth, with a sharp drop in layoffs, has helped lower the unemployment rate to 7.4 percent in July from 7.9 percent in January. In anticipation of the report on Friday, analysts were predicting that employers added 180,000 jobs in August, with the jobless rate staying stable at 7.4 percent.

The improved jobs market is a major reason many economists expect the Fed to begin scaling back purchases of Treasury and mortgage-backed securities this month. The $85 billion in monthly bond buying has helped keep interest rates low to encourage consumers and businesses to borrow and spend more.

At its policy meeting on Sept. 17 and 18, the Fed will consider whether to taper its bond purchases and, if so, by how much.

Several reports released on Thursday and earlier this week have backed Fed officials who say the economy is healthy enough to stand the tapering.

Services businesses, which employ about 90 percent of the American work force, expanded last month at their fastest pace in nearly eight years, the Institute for Supply Management reported. Sales and new orders rose. Services companies hired at their fastest pace in six months. The institute’s index of service sector growth has jumped 5.8 points in the last two months, to 58.6 — the biggest two-month increase since it began in 1997.

The four-week average of first-time applications for unemployment benefits fell in the last month to its lowest point since October 2007, two months before the recession. In the latest reporting week, initial jobless claims dropped 9,000, to a seasonally adjusted 323,000.

The payroll provider ADP reported that American businesses added 176,000 jobs in August. Factory activity last month reached its strongest pace in more than two years. Americans bought new cars and trucks in August at the fastest annual pace since November 2007, with sales jumping 17 percent from a year earlier.

Article source: http://www.nytimes.com/2013/09/06/business/economy/economy-is-showing-new-signs-of-strength.html?partner=rss&emc=rss

Claims for Jobless Benefits Inch Higher

WASHINGTON — The number of Americans filing new claims for jobless benefits edged higher last week, the Labor Department said Thursday, but the four-week average dropped to its lowest level in five years and pointed to ongoing healing in the labor market.

Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 336,000. Economists polled by Reuters had expected 342,000 first-time applications last week.

The four-week moving average for new claims, a measure of labor market trends, fell 7,500 to 339,750, the lowest level since February 2008.

Still, while layoffs have ebbed over recent months, companies have been cautious about adding new employees and the Federal Reserve has appeared worried that belt tightening by the government could dampen progress made in the labor market.

The Fed on Wednesday pressed forward with its aggressive policy stimulus, pointing to still-high unemployment, fiscal headwinds out of Washington and risks from abroad.

The Fed action came despite a rash of recent data showing the economy gathering strength. Retail sales have been stronger than expected, manufacturing output has picked up and employment growth has quickened, with the jobless rate dropping to 7.7 percent last month from 7.9 percent in January.

Last week, the number of people still receiving benefits under regular state programs after an initial week of aid rose 5,000 to 3.053 million in the week ended March 9.

The previous week’s claims figure was revised to show 2,000 more applications than previously reported.

Separately, a private group said home resales in the United States hit a three-year high in February and prices jumped, adding to signs of an acceleration in the housing market recovery, even though the supply of properties on the market increased.

The National Association of Realtors said existing home sales increased 0.8 percent to an annual rate of 4.98 million units last month, the highest level since November 2009. The January sales pace was revised up a 4.94 million units from the previously reported 4.92 million units.

Homes took about 74 days to sell in February, according to the median estimate, down from 97 days from a year ago.

The rise in sales last month was the latest indication that the housing market was gaining more ground. Data this week showed builders broke ground on more houses in February and permits for future construction approached a five-year high.

“With buying conditions remaining very supportive to demand and overall economic fundamentals continuing to improve, we expect the momentum in housing activity to improve further, providing a supportive backdrop for the recovery more generally,” said Millan Mulraine, a senior economist at TD Securities in New York.

Article source: http://www.nytimes.com/2013/03/22/business/economy/claims-for-jobless-benefits-inch-higher.html?partner=rss&emc=rss