US labour market remains strong, but jobless claims rise unexpectedly

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US labour market remains strong, but jobless claims rise unexpectedly

On Thursday, data from US Labour Department had orchaestrated an unexpected uptick in weekly initial jobless claims, though labour market continues to gather steam as mid-Atlantic factory activity hits a roughly 50-year peak with an acceleration in nationwide pandemic vaccination campaign restoring business owners’ confidence to a quicker reopening.

In point of fact, although US initial jobless claims rose unexpectedly last week, a rapid downturn in pandemic cases in the United States coupled with a flexible and ultra-dovish monetary policy helped put the economy on course to its steepest growth in more than 37 years, while factory activity in mid-Atlantic region had hit a record 50-year peak this month, other economic data released earlier in the day had unveiled.

US initial jobless claims drop last week

Apart form that, according to US Labour Department data released earlier in the day, the number of Americans applying for first-time state unemployment benefits rose 45,000 to a seasonally adjusted 770,000 during the week that ended on March 13, compared to a reading of 725,000 clocked a week earlier, missing an analysts’ forecast that estimated about 700,000 initial jobless claims last week.

If truth is to be told, latest rise in initial jobless claims data came as a surprise to many, as a day earlier, the US Fed had forecasted a rapid upsurge in US economy following release of Biden Administration’s $1.9 trillion in pandemic stimulus packages.

Nevertheless, downplaying latest Labour Department data, a JPMorgan analyst Daniel Silver wrote in a client note following the announcement, “The recent declines are consistent with the idea that claims are trending lower as the labor market recovers, aided by progress on virus containment, and we think that this recovery will continue over time.