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Falling unemployment claims signals American labour market progress

By Religare
|

The number of Americans who filed for unemployment claims fell last week, signaling a pickup in the US labour market recovery, lifting the outlook for the world's biggest economy.

Unemployment claims fell by 9,000 to 346,000 in the week ended June 22, the Labour Department said in a report on Thursday.

In the prior week, jobless claims stood at 355,000.

The latest data signals that American companies are reducing firings amid hopes of sustained demand driven by a rebound in the housing market and consumer optimism.

 

American consumers are stepping up purchases as rising house values and higher incomes boost sentiment, lifting the outlook for businesses, supporting hiring prospects.

An improving economic outlook in the Euro area also augers well for American companies as overseas demand outlook improves despite a slowdown in China.

At the same time, the USD 85 billion across-the-board federal spending cuts are weighing on manufacturing, limiting hiring prospects.

The economy added 175,000 jobs in May, up from 149,000 in April. Further job gains are needed for a substantial improvement in the US economic outlook.

A sustained pickup in the labour market over the next few months may prompt the US Federal Reserve to taper its monthly bond buying program.

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Story first published: Friday, June 28, 2013, 22:52 [IST]
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