US weekly jobless claims fall

[WASHINGTON] The number of Americans filing for unemployment benefits fell last week, suggesting the labour market was on solid footing despite the coronavirus outbreak, which has stoked financial market fears of a recession and prompted an emergency interest rate cut from the Federal Reserve.

Labour market strength was underscored by other data on Thursday showing planned job cuts by US-based employers fell sharply in February. While the coronavirus epidemic is expected to slow the economy, the labour market stamina, if sustained, could keep the longest expansion on record, now in its 11th year, on track.

The Fed on Tuesday slashed its benchmark overnight interest rate by a half percentage point to a target range of 1.00 per cent to 1.25 per cent. It was the US central bank's first emergency rate cut since the height of the financial crisis in 2008. Fed Chair Jerome Powell acknowledged the economy's strong fundamentals, but said, "the coronavirus poses evolving risks to economic activity."

Initial claims for state unemployment benefits slipped 3,000 to a seasonally adjusted 216,000 for the week ended Feb 29, the Labour Department said. Jobless claims are the most timely labour market indicator and are being closely monitored for clues on the coronavirus' impact on the economy.

Economists polled by Reuters had forecast claims would fall to 215,000 in the latest week. The four-week moving average of initial claims, considered a better measure of labour market trends as it irons out week-to-week volatility, rose 3,250 to 213,000 last week.

The virus is disrupting supply chains and is also expected to undermine exports and demand for transportation, leisure and hospitality services. US economic growth in the first half of the year is forecast around 1.0 per cent. The economy grew 2.3 per cent in 2019.

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So far, the labour market appears to be weathering the storm. In a separate report on Thursday, global outplacement firm Challenger, Gray & Christmas said job cuts announced by US-based companies fell 16.4 per cent to 56,660 in February.

It said the coronavirus outbreak "has not yet caused companies to cut positions," but said this "may change if the supply side remains dormant."

REUTERS