- Stephen Stanley, chief economist at Pierpont Securities LLC
The number of Americans filing applications for jobless benefits unexpectedly climbed higher last week, however the underlying trend is pointing to the improving conditions. A weekly report from the Labor Department showed the number of initial jobless claims rose by 14,000 in the week ended April 25, totalling 344,000, hitting the highest level since February. Claims for the previous week were revised to show 1,000 more applications that previously reported. The less-volatile four-week moving average, which is considered to be a better measure of labour market conditions, climbed only 3,000. A slightly more subdued pace of firings is likely to provide more room to step up hiring depending on how much domestic demand picks up after the economy almost stopped in the first quarter of this year.
Analysts are now making bets on whether the recent slowdown is only temporary. At the time being, the Commerce Department said that consumer spending, which accounts for a majority of overall economic activity, climbed 0.9% in March, following a 0.5% increase in February. Consumer spending was mostly buoyed by a 1.4% jump in goods purchases. Other sub-indexes posted solid gains as well, meaning the rise in spending is getting broad-based. With solid spending, and a 0.5% rise in income the world's largest economy will continue building up steam in the foreseeable future, meaning 0.1% growth in Q1 was caused by bad weather.
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