The number of Americans applying for unemployment benefits rose slightly over the past week but has remained at a very low level for decades, indicating that the US labor market is stable. The initial unemployment claims increased with seasonally adjusted 3,000, or slightly above 1%, to 229,000 for the week ending March 17th. This is above expectations of economists for 225,000 applications.
The weekly unemployment claims remain below the key threshold of 300,000 in about three years, which is the longest retention period at 1970 levels when the US population was much less than now.
The increase in the number of unemployed people last week is ultimately insignificant, which implies strong employment growth in March, and this should also support consumer spending. According to the most recent data, the employment in the US continues to grow in January, with new jobs outside agriculture amounting to 220,000 against the expected 180,000.
The salaries have risen at their fastest pace for more than 8 years, and unemployment remains at 4.1%, the lowest level since 2000.
Since the last week’s Federal Reserve meeting, it has become clear that the median estimate for US economic growth this year has risen to 2.7% from 2.5% in December, indicating consumer confidence in the US despite the recent weak readings of retail sales. The estimate for 2019 was increased to 2.4% from 2.1%.
The forecast for the long-term sustainable growth of the economy remains unchanged at 1.8%, suggesting that central bankers remain skeptical of the expected effects of the tax cuts on growth. The median estimate of GDP growth for 2020 is also unchanged and remains at 2%.