U.S. labor market on solid footing; manufacturing still slowing

WASHINGTON (Reuters) – The number of Americans filing applications for unemployment benefits fell more than expected last week, pointing to underlying labor market strength despite a sharp slowdown in job growth in May. FILE PHOTO: Job seekers speak with potential employers at a City of Boston Neighborhood Career Fair on May Day in Boston, Massachusetts,…

U.S. labor market on solid footing; manufacturing still slowing

WASHINGTON (Reuters) – The number of Americans filing applications for unemployment benefits fell more than expected last week, pointing to underlying labor market strength despite a sharp slowdown in job growth in May. FILE PHOTO: Job seekers speak with potential employers at a City of Boston Neighborhood Career Fair on May Day in Boston, Massachusetts, U.S., May 1, 2017. REUTERS/Brian Snyder/File PhotoBut the outlook for the economy continues to darken. Other data on Thursday showed factory activity in the mid-Atlantic region stalled in June, likely reflecting a recent escalation in trade tensions between the United States and China. The trade war has increased uncertainty over the U.S. economic outlook, prompting the Federal Reserve on Wednesday to signal it could cut interest rates by as much as half a percentage point over the rest of this year. The U.S. central bank kept rates unchanged on Wednesday. “Solid labor market conditions supporting a strong consumer sector provides a solid base underneath the economy,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. Initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 216,000 for the week ended June 15, the Labor Department said. Economists polled by Reuters had forecast claims would decrease to 220,000 in the latest week. The Labor Department said no states were estimated. The drop in claims followed three straight weekly increases. Claims are being closely watched for signs of a rise in layoffs stemming from the trade dispute. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 1,000 to 218,750 last week. The claims data covered the survey period for the nonfarm payrolls component of June’s em
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