US Labour Department data on weekly initial jobless claims released earlier on Thursday bolsters analysts’ views that an utter stagnation in labour market in context of a deep decline in re-hiring coupled with a rise in layoffs, could lead to a second straight month of job losses in January as the number of Americans filing for state unemployment benefits for the first time in their lives decreased marginally for the week that ended on January 16.
Nonetheless, other economic data released earlier in the day had brightened up the possibilities of a rapid acceleration in recovery considering the trillion-dollar pandemic stimulus bill proposed by the US President Joe Biden earlier this month.
US Senate in tandem had passed a $892 billion pandemic stimulus in a separate bill later last month. Amid such conflicting narratives of a stagnation in labour market and a robust manufacturing output alongside housing data, uncertainties were propelling higher over an recovery from pandemic associated fiscal fallouts, however, analysts suggested that the efficacy and pace of a mass-scale vaccination campaign in the United States would likely to dictate the fundamentals of a recovery in a near-term outlook.
Labour market woe persists, but housing and factory activity step up
Besides, other data released earlier in the day had revealed that the US homebuilding and applications for building permits rose to a record 14-year peak last month, while manufacturing activity in mid-Atlantic region ramped up and orders for US-borne capital goods had also witnessed an uptick, depicting the debarkation of a strong economic outlook that was largely compounded by a persistent sluggishness in labour market.
Nevertheless, according to US Labour Department’s weekly initial jobless data, first-time claims for state unemployment benefits fell 26,000 to a seasonally adjusted 900,000 for the week that ended on January 16, down from a reading of 965,000 registered a week earlier.
Meanwhile, referring to Biden Administration’s preparedness to insulate lower-wage earners, a Chief economist at MUFG in New York, Chris Rupkey said, “The new Biden administration really has its hands full trying to support the economy. ”