- Janet Yellen, Federal Reserve Chairwoman
It seems that the U.S. officials are playing with investors, making it more and more complicated to say whether the economy is building up steam following severe winter, or the damage was more serious. The world's largest economy continues to send mixed signals, with the labour market pointing at the ongoing recovery, while other sectors are still not convincing.
A weekly report from the Labor Department showed the number of initial jobless claims fell 26,000 in the week ended May, hitting 319,000, with the decline snapping third straight week of increases. The figure came stronger-than-expected, and with the four-week moving average hovering at levels consistent with an improving labour market, we can see a further drop in the unemployment rate and more upbeat comments from the Fed.
As we all know, consumer spending is the largest part of the U.S. economic output. Hence, any changes in the consumers' mood can have a direct impact on GDP. A separate report from Bloomberg showed the consumer comfort index slumped to 37.1 for the week ended May 4 from 37.9 a week earlier. Interesting, that a drop came even despite an upbeat payrolls and unemployment rate. Nevertheless, the index remained above 37-mark for the third consecutive week, posting the best performance since January 2008.
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