|Follow us on:|
The US Department of Labour has reported that initial jobless claims unexpectedly dropped below forecasts to 311,000 in the third week of March.
Analysts had expected initial jobless claims to rise to 325,000; the new data is the lowest since November 2013.
The Labour Department’s figures released Thursday also indicate that the effects of what the media labelled the US economic winter chill may be wearing off; a drop in jobless claims could mean markets are ready to continue the growth seen last fall.
Additional data in the report showed that some 3.3 million Americans received benefits in the first week of March – a 43,000 drop from the previous week.
In the same week, a report showed that despite the addition of 175,000 jobs to the economy in February (up from 129,000 in January), the actual number of people who have been out of work for at least six months rose by 203,000.
And while the Department increased its estimate of job creation last month, the overall unemployment rate increased from 6.6 to 6.7 per cent.
But year-on-year, the job creation figures were lower; at this time in 2013 the economy had added 190,000 jobs.
Meanwhile, a prominent member of the Federal Reserve’s Open Market Committee (FOMC) told investors at a conference in Hong Kong on Wednesday that he expects robust economic growth will pull the unemployment rate below 6 per cent by the end of the year.
The Federal Reserve always said it would keep the $85-billion stimulus package in effect until the unemployment rate fell below 7 per cent. But at the beginning of 2014, the Fed has twice tapered its package down to $65 billion, with further cuts in $10-billion increments expected in the coming months.
Bullard said the US economy is improving and unemployment had fallen much more quickly than many people expected.
According to the Bureau of Economic Analysis US GDP grew at an annualized rate of 2.6 per cent in the fourth-quarter last year, slightly less than the 2.8 per cent expectation.