The U.S. job market is still strong, and the manufacturing industry is coming to spring

by:Gewinn     2022-04-26
U.S. jobless claims unexpectedly rose last week, but layoffs plummeted in March, suggesting the labor market's momentum remains intact. However, the improvement in the labor market has not led to strong wage growth, leaving little hope of the Fed raising interest rates anytime soon. The Federal Reserve also took a cautious wait-and-see attitude towards the development of the global economy. Initial jobless claims rose by 11,000 to a seasonally adjusted 276,000 for the week ended March 26, the U.S. Department of Labor announced on Thursday (March 31). Analysts had expected initial jobless claims to be flat at 265,000. 'The current level of jobless claims is still consistent with low involuntary turnover, and today's data, like other employment data released in March, reflects labor market conditions at the end of the first quarter. There have been no major changes,' said John Ryding, chief analyst at RDQ Economics. Claims have been below 300,000 for 55 consecutive weeks, the longest stretch since 1973. The 300,000 mark is a watershed in how healthy the job market is. With the job market continuing to tighten supply, the chances of a further sharp drop in jobless claims are likely to be very limited. Last week, the four-week average of initial jobless claims rose by 3,500 to 263,250. The market believes that the data eliminates week-to-week fluctuations and can more accurately reflect labor market trends. In addition, global human resources consulting firm Challenger, Gray u0026 Christmas reported that U.S. employers announced 48,207 layoffs in March, a 21.7% drop from February. 'The number of layoffs has started to decrease after a surge in the first two months of the year,' said John Challenger, chief executive of Challenger, Gray u0026 Christmas. After the data was released, the price of U.S. Treasury bonds rose, the U.S. dollar index fell, and U.S. stocks strengthened. The job market remains robust The Federal Reserve raised interest rates in December for the first time in nearly a decade. Federal Reserve Chair Janet Yellen said on Tuesday that slowing global growth and falling oil prices posed downside risks to the U.S. economic outlook. She also noted that policymakers should 'adjust policy carefully.' Last week's jobless claims data had no impact on Friday's March nonfarm payrolls report, as last week was outside the time frame covered by the March survey. Analysts expected nonfarm payrolls to increase by 205,000 jobs in March, after a rise of 242,000 in February, a Reuters poll showed. The unemployment rate will be flat at an eight-year low of 4.9%. Separately, data from the Institute for Supply Management (ISM) in Chicago showed that manufacturing jobs in the Midwest jumped to a near one-year high in March, which also helped boost the labor market. The Chicago Purchasing Managers' Index (PMI) rose 6 points to 53.6 in March, helped by an increase in production, new orders and outstanding orders, data from ISM Chicago showed. The data was above 50, indicating an expansion in manufacturing activity in the region. The Chicago PMI rose strongly, the latest indicator that the downturn in manufacturing may be over. 'The rise in new orders suggests that growth will continue in the coming months. Manufacturing may have bottomed out,' said Jay Morelock, an analyst at FTNFinancial.
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