The number of unemployed Americans filing for unemployment benefits has dropped last week to a one-and-a-half-year high.
Initial claims for unemployment benefits have gone down drastically from 253,000 to 234,000 last week ended February 2. The initial claims have decreased almost by 19,000.
Non-farm payrolls have increased in January with 304,000 jobs. This has been the biggest gain seen since February 2018.
The labor market is strong and will further support the economy, even though other places like Europe and China are facing a slowdown in economic growth.
High claims were due to the government shutdown for 35 days which came to a close on January 25 after a temporary agreement to end the shutdown, was announced by President Trump. Employees were affected for a month.
Economists also contribute the strike in California by teachers to the surge in initial claims. Moving holidays such as Martin Luther King Jr day, have been higher this year.
To be more accurate, the four-week moving average is considered a better measure of the trend in the labor market. It has increased to 224,750, a rise by 4,500, which is a two-month high. However, they are still at low levels.
The strong labor data is just a confirmation of the statement made on Wednesday, by Federal Reserve Head Jerome Powell. He has said that the U.S. economy is in a good place now. He further says that the Fed will be patient while increasing borrowing costs even further. No hike in interest rates was announced last week.
Economists say that layoffs are low, which denote a strong labor market, which is good for the economy.
The U.S. markets have been strong in January after the slump that prevailed in December. This has offset the negative mood in the market. Yields are found to be lower than last year when it saw a seven-year high.
