The number of Americans who filed new benefit requests for unemployment remained below levels prior to the pandemic last week, while consumer spending rose solidly, putting the economy on the right track for a strong end to 2021.
But pressures on prices continue to mount and a reading of the inflation Core posted its largest annual increase since the 1980s in November.
Thursday’s reports came as the nation faces a resurgence of the Covid-19 infections, driven by Delta variants Y Omicron, which could hamper the economic growth in the first trimester.
Initial claims for state unemployment benefits were unchanged at 205,000, based on seasonally adjusted figures, for the week ending Dec. 18, the said Department of Labor. Earlier this month, orders fell to a level last seen in 1969.
Economists polled by Reuters had forecast 205,000 requests for the past week. Orders have fallen from a record 6.149 million in early April 2020.
Requests generally increase during cold weather months, but an acute worker shortage has disrupted that seasonal pattern, resulting in fewer seasonally adjusted orders in recent weeks. Discounting weekly volatility, the working market it is adjusting, with the unemployment rate at a 21-month low of 4.2 percent.
“The normal backlog of layoffs in December has been more subdued than usual this year, resulting in historically low levels of applications on a seasonally adjusted basis,” said Lou Crandall, chief economist at Wrightson ICAP in Jersey City.
A separate report from the Commerce Department showed Thursday that consumer spending, which accounts for more than two-thirds of the country’s economic activity, U.S, increased 0.6% last month.
October data was revised upwards and shows that spending rose 1.4% instead of 1.3%, as previously reported. Economists polled by Reuters had forecast consumer spending to rise 0.6% in November.
Services such as travel during vacation Thanksgiving accounted for much of the increase in consumer spending. Product disbursements were weaker after Americans started their business early. Christmas shopping to avoid empty shelves due to shortage.
The economy grew at an annualized rate of 2.3% in the third quarter and consumer spending increased at a rate of 2.0 percent. Growth forecasts for the fourth quarter range at a maximum of 7.2 percent. For all of 2021, the economy is expected to have expanded 5.6%, which would be the fastest pace since 1984, according to a Reuters survey of economists. The START The US contracted 3.4% in 2020.
Inflation accelerated further in November. The index of prices of personal consumption expenses (PCE), excluding volatile food and energy components, rose 0.5% after posting a similar gain in October.
In the 12 months through November, the so-called core PCE price index accelerated 4.7 percent. It was the largest increase since the 1980s and followed a 4.2% year-on-year increase in October.
Reference-www.eleconomista.com.mx