"This tells us that business spending is picking up on the back of rising confidence, which adds to the sense that the recovery is (becoming) more self-sustaining"
- Chris Williamson, chief economist at Markit
The number of jobless claims in the world's largest economy fell last week to the lowest level in a month, as a typical year-end volatility waned. Applications for unemployment benefits declined by 2,000 to 339,000 in the period ended December 28, the Labor department said Thursday. However, the four-week average, a less volatile measure, rose to 357,250 from 348,750 a week earlier. The number of people continuing to receive unemployment insurance fell by 98,000 to 2.83 million in the week ended December 21. Firing is likely to be limited this year as gains in business and consumer spending help the U.S. economy strengthen. Further recovery in the labour market will depend on lawmakers' progress in budget negotiations this month.
In the meantime, the U.S. manufacturing productivity rose in December at its fastest pace in 11 months, while the rate of job gains was the most rapid since March. According to Markit, U.S. manufacturing PMI surged to 55.0, up from 54.7 in November, beating analysts' expectations of 54.4. Signs of strength in both services and manufacturing sectors as well as stronger jobs gains across the nation's economy contributed to the Fed's decision in December to start slowing its monthly asset purchases.
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