-Joel Naroff, president of Naroff Economic Advisors
The number of applications for US unemployment benefits remained below $300,000 for the seventh consecutive week, adding to signs of a rebound in payrolls after hiring declined in March. Employment growth slowed sharply in March, with nonfarm payrolls rising by only 126,000, ending a 12-month streak of gains above 200,000. Jobless claims rose by 1,000 to 295,000 in the week ended April 18, a Labor Department report showed. The four-week moving average of claims, a better measure of labour market trends as it excludes week-to-week volatility, increased 1,750 last week to 284,500. Claims below 300,000 are associated with a strengthening labour market. Yet, Fed officials have said they would like to see further strengthening of the labour market before hiking interest rates. Sluggish economic growth at the beginning of the year has made a June rate hike less possible.
Meanwhile, a separate report by Markit showed activity in the US manufacturing sector declined to the lowest level in three months. Preliminary data revealed the manufacturing PMI fell to 54.2 in April, down from 55.7 and compared with economists' expectations for a 55.5 reading. The output component dropped from the final March read of 58.8 to 55.4, which was also the weakest since January. The sub-index measuring new orders also slid in April, coming in at 55.4, compared with March's reading of 57.2.
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