Declines in unemployment applications, higher gas prices and mixed feelings on income were what the days of February seem to have been filled with. As we await the official Bureau of Labor Statistics jobs report, which will be released on March 9th, there is data on the month from other sources that reveal improvements as well as downfalls.
According to some reports, applications for unemployment benefits have continued to steadily drop and by the BLS statistics they fell to a seasonally adjusted 351,000. That is the lowest level we have seen in the last four years. In conjunction with that, applications for unemployment aid have fallen a total of 15 percentage points since last October and continue to fall. The drop in these applications hints that hiring is steadily increasing so the need for unemployment benefits decreases.
On that note, economists predict that roughly 200,000 jobs were added to the market in the month of February. Paul Ashworth, senior U.S. economist for Capital Economics, believes that there were 220,000 added last month and was quoted saying, “the labor market appears to have strengthened markedly over the last few months.” Unfortunately, other experts say that the increased job creation is great, but is not facilitating more consumer spending, which is something we need just as much as an increase in jobs. Perhaps that is due to the very small increase in incomes economists predicted.
According to the Commerce Department, the average income rose 0.3 percent, the second month it has increased. However, after paying taxes and applying inflation adjustments, the incomes actually dipped. Joel Naroff, chief economist for Naroff Economic Advisors, was quoted saying, “The rise (in incomes) was reasonable but given the strong job gains, I was hoping that the increases in wages and salaries would be a bit greater than they were. Still, this source of funds is on the rise so that is good news.”
In other job market news, the manufacturing industry’s growth has seemed to slow, according to the Institute for Supply Management’s monthly index. Apparently factories in the U.S. faced higher prices for raw materials and received less new orders than they did last month. This is a shift from the steady increase and growth the industry has seen these past few months. Construction is in the same boat as manufacturing and saw a dip in numbers. On the other hand, auto and retail sales both increased.
SOURCE: Canadian Business
IMAGE: Courtesy of Gazelle Index