The number of Americans claiming unemployment benefits for the first time fell by 1,000 to 268,000. This means that the country's unemployment benefit payment rate has reached its lowest level since March 2020. A strong labour market, which was typical of the American economy in the pre-crisis period, is once again a feature of it. As can be seen, the US economy has started to recover after a brief lull in the run-up to winter. Notably, the summer period in the United States fell on the spread in the country of a new strain of the COVID-19, which is slowing the recovery process.
Despite the positive news, the demand for labour force in the US is still very high. "Demand for labor is very strong and workers are in short supply, so layoffs are very low right now," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. Millions of unemployed Americans do not want to go to work, preferring to stay at home even after generous federal government benefits expire. The opening of schools for full-time training and increasing wages by companies have so far failed to solve the problem.
On Thursday, it was announced that manufacturing activity in the mid-Atlantic region had accelerated this month. For example, representatives of factories in eastern Pennsylvania, southern New Jersey and Delaware reported a significant increase in orders. Despite this positive news, the shortage of workers and the necessary raw materials has left companies with a lot of unfinished work. Even an increase in working hours has not helped to solve the problem. For this reason, manufacturing companies are predicting a rise in capital expenditure next year.
It should be noted that the production of many goods in the US is facing great difficulties. There is currently a very high demand for various products on the market, but it is almost impossible to meet consumer demands in a timely manner. Oren Klachkin, a leading economist at Oxford Economics in New York, said supply chain difficulties would not be resolved next year. Hopefully, the second half of 2022 will be more positive in this regard.
Notably, the recovery of the US labour market is keeping pace with rising US consumer inflation. The US inflation rate is now at its highest level since the last time it was seen 30 years ago. Analysts therefore expect the Federal Reserve to begin raising interest rates earlier than many other regulators.
The recovery in the US labour market is a positive sign for the dollar, which traded higher on Friday, particularly against the euro. The dollar was up 0.53% to 95.99 against a basket of six other currencies.
