More Americans than forecast filed applications for unemployment benefits last week and consumer confidence declined by the most in a year, signalling that a cooling labour market may restrain household spending.
Jobless claims fell to 388,000 from a revised 389,000 the previous week that was the highest since early January, labour department figures showed. The Bloomberg consumer comfort index fell to minus 35.8 from minus 31.4 the previous week.
“There has been some slowdown in the labour market,” said Yelena Shulyatyeva, a US economist at BNP Paribas in New York, who correctly projected the level of jobless claims. “That makes consumers feel less confident and makes them more cautious about their spending.”
Fewer firings are needed to lay the groundwork for more hiring and support consumer demand, which makes up 70 per cent of the economy.
Another report yesterday showed that signed contracts to buy homes rose more than forecast in March, more evidence of a stabilising housing market that may boost confidence. – (Bloomberg)
