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Economics Gazette

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January 24, 2019

US unemployment claims are rising more than expected

US unemployment claimsThe US unemployment claims are rising more than expected from the 48-year low that they have reached, but their numbers continue to signal a tightening of the labor market, according to US Department of Labor data. The number of applications has increased by 21,000 to the seasonally adjusted 231,000, which is the biggest increase in six months. The analysts’ expectations were that the number of applications would reach 220,000.

Even with the latest increase, however, the number of applications for unemployment remains historically low, indicating that employers prefer to keep their workers in the background of a growing economy and a shrinking set of qualified candidates.

While unemployment claims are below 300,000, the labor market is considered to be in a healthy state.

According to the Federal Reserve, the US labor market is close to full employment.

According to data from the Ministry of Labor, the average hourly wage jumped by 2.9% yoy in January, the biggest increase since June 2009, after it rose by 2.7% in December.

The personal spending in the US rose by 0.2% in January against an increase of 0.4% in December. This is the weakest rate of increase in consumption spending in five months.

The analysts expect the economic growth for the first quarter to be weak due to a seasonal trend but is likely to accelerate in the rest of 2018 amid stimulating tax reform and rising government spending. The forecasts for GDP growth for the first three months of the year are for an increase of 1.8%.

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