Jobless Claims Fall, Services Turnover Rises
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People are spending more on services and less jobless claims hint at a recovering American labor market. Initial weekly jobless claims fell from 18,000 to 259,000, far below expectations of a 5,000 drop to 272,000. Continuing claims also fell slightly, as 2.225 million unemployed workers in the United States continue to request help, as they cannot find work. Initial claims fell to the lowest point since October 2015, after several weeks of broad increases. The 4-week moving average for initial claims fell to 267,500.
People are spending more on services and less jobless claims hint at a recovering American labor market. Initial weekly jobless claims fell from 18,000 to 259,000, far below expectations of a 5,000 drop to 272,000. Continuing claims also fell slightly, as 2.225 million unemployed workers in the United States continue to request help, as they cannot find work. Initial claims fell to the lowest point since October 2015, after several weeks of broad increases. The 4-week moving average for initial claims fell to 267,500.
The Department of Labor noted the decline in jobless claims as a broad based improvement across sectors. More claims from former Federal civilian employees were offset by a decrease in the private sector, but newly discharged veterans are also claiming more unemployment insurance benefits from the prior week.
Unemployment rates remained the highest in Alaska, West Virginia, New Jersey, and Rhode Island, while blue states Massachusetts and California had lower unemployment rates and less claims from the prior week.
The largest increases in claims was seen in New York, which saw its initial claims roughly double, and offset declines in many other states. The Department of Labor commented that transportation, warehousing, education, accommodation, and food services all saw layoffs in the week.
Stronger Services Spending
A quarterly study of services spending by the Census Bureau found that more people are spending in the sector, which rose 1.5% from the previous quarter and 2.1% from the prior year. In total, $3.38 trillion was spent on services in the United States during the last quarter of 2015.
The results confirmed previous reports that America’s GDP has shown renewed strength in the last quarter of 2015, when the economy expanded by 1% after rising 2% in the 3rd quarter of last year. That increase, which was largely due to an increase in Personal Consumption Expenditures, implied stronger spending in services.
The Census Bureau’s recent report confirms this, but also saw strength in business-to-business spending as well. The information sector saw a 4.7% year-over-year increase in revenue to $358.9 billion, while professional, scientific, and technical services, which include both consumer and business-facing services, rose 2.8% to $415 billion.
More consumer-facing services also saw strong growth. Education services rose 4.4% year-over-year, arts, entertainment, and recreation rose 7.4% year-over-year, and health care and social assistance was up 3.5% year-over-year.
However, some sectors saw a decline. Inland water transportation, pipeline transportation, newspaper and magazine publishers, and some financial services firms all saw revenues decline in the quarter. Nonetheless, the majority of industries saw gains in a broad-based signal that America’s economy may be gaining strength, even as manufacturing and goods-producing firms have suffered weakness.
