The U.S. Labor Department said on Thursday that the number of initial jobless claims has increased slightly while other data shows that at the same time, the unemployment rate has fallen, accompanied by a small increase in wages.
The number of initial jobless claims has remained below the key figure of 300,000 for the sixteenth week in a row, following a small increase of 3,000 to 271,000 during the period 14 to 20 June. This is the longest period since 2001 that the figure has been maintained at lower than the important 300,000 level.
The low number of initial claims seems to indicate that the rate of layoffs is at a very low level while the data also indicates that companies are still taking on new employees.
The U.S. has seen the creation of an average of 217,000 jobs per month for the first 5 months of 2015. This has pushed the unemployment rate down to a respectable 5.5%. There is also evidence that the increase in hiring is forcing companies to offer higher wages in order to attract the best available fresh talent.
A further healthy sign for the economy is the increase in wage levels as reported by the Labor Department. The average hourly earnings of all nonfarm payroll (NFP) employment rose by 8 cents to $24.96 for May. Over the year, average hourly earnings have risen by 2.3%. The other good news is that according to figures released by the Bureau of Labor statistics on June 18, real average earnings increased by 2.6%, seasonally adjusted for the period May 2014 to May 2015.
The effect on the economy of an increase in real earnings is evident from a report by Jeffry Bartash in MarketWatch on 25 June of an increase in consumer spending of 0.9% for May with higher auto sales leading the way. The report adds that this was the biggest consumer spending boost in six years.
The average of new jobless claims taken on a month to month basis shows a drop of 3,250 to a seasonally adjusted 273,750. This has resulted in continuous jobless claims showing an increase of 22,000 to a total of 2.25 million for the week ended 13 June.
The latest figure is close to the lowest it has been in 15 years and could be further evidence that the sluggish economy is starting to move ahead and is shaking off the effects of the great recession which started in 2008.