The number of applications filed by the people in the United States for claiming their unemployment benefits dropped more than the expectations last week, offering fresh evidence that the country’s labor market was gathering steam.
The initial claims for state jobless benefits fell 21,000 to a seasonally adjusted 283,000 for the week that ended on February 14, according to the Labor Department report released on Thursday.
Several economists had made forecasts of state unemployment claims dropping to 293,000 last week.
Chris Rupkey, chief financial economist at New York-based MUFG Union Bank, said, “The jobs market has its pedal to the metal. We have crossed the dividing line where there are more signs of labor shortages now than there is an excess supply of discouraged workers pounding the pavement.”
The country’s labor market was also encouraged by America’s largest private sector employer, Wal-Mart Stores Inc, which said it would spend over USD one billion in 2015 to raise pay for nearly 40 percent of its American workforce.
The hourly full-time and part-time Wal-Mart workers will earn nearly USD 9 per hour, or USD 1.75 above Fed’s current minimum wage, starting in April.
The sturdy growth of wage has been the missing thing in the recovery of jobs, which is signaling towards a rapid increase.
The country’s labor market is becoming robust from jobless claims to payrolls and the job openings even when the rate of economic growth has slowed in the recent months.
In another development, a separate report on Thursday showed the factory activity in the US mid-Atlantic region decelerated in the month of February to its lowest level in a year amid firms struggling hard to get new overseas business.