Fewer people are filing for unemployment than have filed in more that 48 years, showing a strong labor market.
Though business spending on equipment is down for now, the labor market is strong. Fewer Americans are applying for unemployment benefits. In fact, this is the lowest number in more than 48 years. Exports also increased. The dollar rose in value.
Also, economists are saying that the following quarters in 2018 should be even better economically. Predicting the economy seems like trying to predict the weather, but historically the first quarter of the year yields slower economic growth than the other three.
Reuters reports, “U.S. business spending on equipment cooling; labor market strong.”
The number of Americans filing for unemployment benefits fell to the lowest level in more than 48 years last week and the goods trade deficit narrowed sharply in March amid strong export growth.
“The U.S. economy is still moving higher,” said Chris Rupkey, chief economist at MUFG in New York. “The pullback in goods orders from companies is not a red flag for the economic outlook yet even if the caution light should be left on.”[…]
U.S. Treasury yields held at lower levels after the data. The dollar <.DXY> rose against a basket of currencies. Stocks on Wall Street were trading higher as strong earnings from Facebook <FB.O> and a handful of chipmakers powered technology shares.[…]
The anticipated slowdown in economic growth is likely to be temporary against the backdrop of a robust labor market that is expected to underpin consumer spending. The economy is also expected to get a boost from the Trump administration’s $1.5 trillion income tax cut package as well as increased government spending, which should also support business investment.
“We still expect investment growth to pick up over the rest of the year, as tax cuts boost domestic demand and capacity constrains bite,” said Michael Pearce, a senior U.S. economist at Capital Economics in New York.
In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits dropped 24,000 to a seasonally adjusted 209,000 for the week ended April 21, the lowest level since December 1969. Economists polled by Reuters had forecast claims falling to 230,000 in the latest week.
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