And initial unemployment claims fell last, though continuing claims rose slightly.
Consumers are still spending like crazy, but the updated numbers GDP show a slight reduction.
New applications for unemployment benefits fell last week and hovered near historic lows in a sign of a tight U.S. labor market.
Initial jobless claims, a proxy for layoffs, decreased to 210,000 last week from the previous week’s level of 218,000, the Labor Department said Thursday.
Claims remain near 2019 prepandemic levels, when the job market was also historically tight. The four-week average for claims, which smooths out volatility in the weekly figures, rose to 206,750 last week.
Thursday’s report showed continuing claims, a proxy for the total number of people receiving payments from state unemployment programs, increased slightly to 1.35 million for the week ended May 14 from 1.32 million a week earlier. They remain near the lowest level since 1969. Continuing claims are reported with a one-week lag.
The economy continues to feel the effects of Covid-19 and related supply disruptions. Gross domestic product in the first quarter fell at a 1.5% annual rate, down slightly from an initial estimate of a 1.4% contraction, the Commerce Department said in revisions released Thursday. The U.S. economy’s contraction in the first quarter was driven by weaker inventory investment, a wider trade deficit and less government spending.
Consumer spending in the first quarter was revised up to a 3.1% annual growth rate from 2.7%. Many economists expect GDP to resume growth in the second quarter, though there are risks to the outlook, including a slowdown in the housing market and elevated inflation.
The latest Federal Reserve minutes are saying that they are looking at a 50 basis point (½%) rate increases at each of the next two or three meetings, so my money is on a recession sooner rather than later.
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