U.S. weekly jobless claims retreat from one-and-a-half-year high

Job seekers and recruiters gather at TechFair in Los Angeles, California, U.S. March 8, 2018. REUTERS/Monica Almeida

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing applications for unemployment benefits dropped from near a 1-1/2-year high last week, but the decline was less than expected, suggesting some moderation in the pace of job growth.

Still, the Labor Department’s report on Thursday continued to point to strong job market conditions, which should underpin the economy amid rising headwinds, including a fading fiscal stimulus boost and a trade war between Washington and Beijing, as well as slowing growth in China and Europe.

The Federal Reserve last week kept interest rates steady but said it would be patient in lifting borrowing costs further this year in a nod to growing uncertainty over the economy’s outlook. The U.S. central bank removed language from its December policy statement that risks to the outlook were “roughly balanced.”

“Labor market conditions remain quite positive, good news for workers, for the consumer sector and the economy more broadly,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

Initial claims for state unemployment benefits tumbled 19,000 to a seasonally adjusted 234,000 for the week ended Feb. 2, the Labor Department said on Thursday. The drop partially unwound the prior week’s jump, which lifted claims to 253,000, the highest reading since September 2017.

Claims that week were boosted by layoffs in the service industry in California, most likely striking teachers in Los Angeles.

A 35-day partial shutdown of the federal government as well as difficulties adjusting the data around moving holidays like Martin Luther King Jr. day, which occurred later this year than in recent years, also probably contributed to the spike in filings.

The longest shutdown in history likely forced workers employed by government contractors to file claims for unemployment benefits.

The shutdown ended on Jan. 25 after President Donald Trump and Congress agreed to temporary government funding, without money for his U.S.-Mexico border wall.

Economists polled by Reuters had forecast claims falling to 221,000 in the latest week.

U.S. stocks were trading lower on renewed fears of a global slowdown after the European Union cut its economic growth forecasts and White House adviser Larry Kudlow warned there was still a sizable distance to go on U.S.-China trade talks. The dollar was little changed against a basket of currencies, while U.S. Treasury prices rose.

MOMENTUM SLOWING

The Labor Department said no states were estimated last week. 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 4,500 to 224,750 last week. Claims by federal government workers, which are filed separately and with a one-week lag fell 8,070 to 6,669 in the week ended Jan. 26.

“Claims remain important to watch in the weeks ahead,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in White Plains, New York. “The data are suggesting at least some slowing in employment growth.”

The government reported last Friday that non-farm payrolls increased by 304,000 jobs in January, the largest gain since February 2018. Thursday’s claims report showed the number of people receiving benefits after an initial week of aid fell 42,000 to 1.74 million for the week ended Jan. 26.

These so-called continuing claims had raced to a nine-month high in the prior week. The four-week moving average of continuing claims rose 4,250 to 1.74 million.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Venezuela captures rogue officers after uprising at military outpost

Demonstrators stand close to the remains of a burning car used as barricade during a protest near to a National Guard outpost in Caracas, Venezuela January 21, 2019. REUTERS/Carlos Garcia Rawlins

By Mayela Armas and Brian Ellsworth

CARACAS (Reuters) – Venezuela has captured a group of military officers who stole weapons and kidnapped four officials on Monday, the government said, hours after a social media video showed a sergeant demanding the removal of President Nicolas Maduro.

An unspecified number of officers early on Monday attacked a National Guard outpost in the Caracas neighborhood of Cotiza, a kilometer (0.6 mile) from the presidential Miraflores palace, where they met “firm resistance,” the government said in a statement. Witnesses reported hearing gunshots at about 3 a.m. (0700 GMT) in the area.

An armored vehicle is seen outside an outpost of the Venezuelan National Guards during a protest in Caracas, Venezuela January 21, 2019. REUTERS/Carlos Garcia Rawlins

An armored vehicle is seen outside an outpost of the Venezuelan National Guards during a protest in Caracas, Venezuela January 21, 2019. REUTERS/Carlos Garcia Rawlins

Protesters later burned trash and a car outside the outpost, where the officers were arrested, in a sign of growing tensions following Maduro’s inauguration to a second term that governments around the world have called illegitimate.

Though the incident signals discontent within the armed forces, it appeared to involve only low-ranking officers with little capacity to force change in the hyperinflationary economy as many people suffer from shortages of food and medicine.

“The armed forces categorically reject this type of action, which is most certainly motivated by the dark interests of the extreme right,” the government said in a statement read out on state television.

Maduro was inaugurated on Jan. 10 under an avalanche of criticism that his leadership was illegitimate following a 2018 election widely viewed as fraudulent, with countries around the world disavowing his government.

Opposition leaders and exiled dissidents have called on the armed forces to turn against Maduro, which the president has denounced as efforts to encourage a coup against him.

The opposition-controlled congress’s head, Juan Guaido, said the uprising was a sign of the armed forces’ depressed state of mind. Congress was committed to offering guarantees to officers who helped with “the constitution’s reconstitution,” he said, though he did not want the military to fall into internal conflict.

“We want it to stand as one man on the side of the people, the constitution, and against the usurpation,” he said on Twitter.

In the videos that circulated on Twitter, a group of armed soldiers stood in darkness apparently at the Cotiza outpost while their leader addressed the camera and called for Venezuelans to support their revolt.

“You all asked that we take to the streets to defend the constitution. Here we are. Here we have the troops. It’s today when the people come out to support us,” said the man in the video, who identified himself as Luis Bandres.

The government said the men took two vehicles from a police station in the Macarao district in the west of Caracas before driving to a barracks in the eastern Petare slum, where they stole an arms cache and kidnapped four officials.

After they attacked the Cotiza outpost in the early hours of the morning, security forces surrounded them. In response, several dozen residents barricaded streets and set fire to rubbish as they chanted “Don’t hand yourself in,” according to Reuters witnesses. Troops fired tear gas to disperse them.

“These soldiers are right to rise up. We need a political change, because we don’t have any water or electricity,” said Angel Rivas, a 49-year-old laborer at the protest.

The United States and many Latin American nations say Maduro has become a dictator whose failed state-led policies have plunged Venezuela into its worst ever economic crisis, with inflation approaching 2 million percent.

Maduro says a U.S.-directed “economic war” is trying to force him from power.

(Additional reporting by Vivian Sequera and Corina Pons; Writing by Brian Ellsworth and Angus Berwick; Editing by Marguerita Choy)

Shutdown bites economy as Democrats reject Trump invitation to talk

FILE PHOTO: U.S. President Donald Trump walks before speaking to the media as he returns from Camp David to the White House in Washington, U.S., January 6, 2019. REUTERS/Joshua Roberts/File Photo

By Steve Holland and Ginger Gibson

WASHINGTON (Reuters) – The U.S. economy is taking a larger-than-expected hit from the partial government shutdown, White House estimates showed on Tuesday, as congressional Democrats rejected President Donald Trump’s invitation to discuss the issue.

The shutdown dragged into its 25th day on Tuesday with neither Trump nor Democratic congressional leaders showing signs of bending on the topic that triggered it – funding for the wall Trump promised to build along the border with Mexico.

Trump invited a bipartisan group of members of Congress for lunch at 12:30 p.m. EST (1730 GMT) to discuss the standoff but the White House said Democrats turned down the invitation. Nine Republicans were expected to attend.

Trump is insisting Congress shell out $5.7 billion as about 800,000 federal workers go unpaid during the partial shutdown.

“It’s time for the Democrats to come to the table and make a deal,” said White House spokeswoman Sarah Sanders.

House Democratic leaders said they did not tell members to boycott Trump’s lunch but had pressed those invited to consider whether the talks would be productive or produce a photo-op for the president.

“We are unified,” House Majority Leader Steny Hoyer told reporters on Tuesday morning.

The Trump administration had initially estimated the shutdown would cost the economy 0.1 percentage point in growth every two weeks that employees were without pay.

But on Tuesday, there was an updated figure: 0.13 percentage point every week because of the impact of work left undone by 380,000 furloughed employees as well as work left aside by federal contractors, a White House official said.

SHUTDOWN IMPACT

The partial shutdown is the longest in U.S. history and its effects have begun to reverberate across the country.

Longer lines have formed at some airports as more security screeners fail to show up for work while food and drug inspections have been curtailed and farmers, stung by recent trade spats, have been unable to receive federal aid.

Speaking on CNBC, Delta Air Lines Inc Chief Executive Officer Ed Bastian said the partial shutdown will cost the airline $25 million in lost revenue in January because fewer government contractors are traveling.

Trump ran for office in 2016 on a promise to build a wall to stop illegal immigration and drug trafficking. He had toyed with the prospect of declaring a national emergency to circumvent Congress to secure the funding, but this week has backed off from that idea, which would attract a court challenge.

Democrats, who took over the U.S. House of Representatives this month, have rejected the border wall but back other border security measures.

They have also insisted that Trump and Republicans reopen government before negotiations occur.

“We can keep on the pressure on negotiations over (border) security but it is long past time that we reopen the government, and make sure it is not federal employees, their families and businesses that are being held hostage,” said Democrat Representative Katherine Clark.

House Democrats have passed a number of bills to fund the roughly one-quarter of federal operations that have been closed, but Senate Majority Leader Mitch McConnell, a Republican, has said the chamber will not consider legislation that Trump will not sign into law.

McConnell, who has mainly stayed out of the public fray on the shutdown, on Tuesday accused Democrats of “acrobatic contortions” to avoid negotiating on the shutdown.

(Reporting by Steve Holland, Susan Cornwell, Ginger Gibson, Makini Brice, Susan Heavey; Writing by Roberta Rampton; Editing by Steve Orlofsky and Bill Trott)

U.S. weekly jobless claims point to strong labor market

FILE PHOTO: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing applications for jobless benefits fell more than expected last week, pointing to sustained labor market strength that could further ease concerns about the economy’s health.

The report from the Labor Department on Thursday followed data last week showing employers hired the most workers in 10 months in December and increased wages for their workers.

Surveys showing steep declines in consumer and manufacturing activity in December had stoked fears that the economy was rapidly losing momentum.

“There are increasing risks and caution over the economic outlook in 2019, but jobless claims say the seas are calm and it looks to be smooth sailing for the economy for now,” said Chris Rupkey, chief economist at MUFG in New York.

Initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 216,000 for the week ended Jan. 5. Data for the prior week was revised up to show 2,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims declining to 225,000 in the latest week. The Labor Department said only claims for Puerto Rico were estimated last week.

U.S. financial markets were little moved by the claims report.

Claims were boosted in the week ending Dec. 29 as workers furloughed because of a partial shutdown of the U.S. government applied for benefits. The federal government partially closed on Dec. 22 as President Donald Trump demanded that the U.S. Congress give him $5.7 billion this year to help build a wall on the U.S. border with Mexico.

The shutdown, which has affected a quarter of the government, including the Commerce Department, has left 800,000 employees furloughed or working without pay. Private contractors working for many government agencies are also without pay.

FEDERAL WORKER CLAIMS RISE

Claims by federal workers are reported separately and with a one-week lag. The number of federal employees filing for jobless benefits increased by 3,831 to 4,760 in the week ending Dec. 29. Furloughed federal government workers can submit claims for unemployment benefits, but payment would depend on whether Congress decides to pay their salaries retroactively.

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 2,500 to 221,750 last week.

The economy created 312,000 jobs in December. The unemployment rate rose two-tenths of a percentage point to 3.9 percent as some unemployed Americans piled into the labor market, confident of their job prospects.

While labor market strength has helped to calm fears that the economy, tighter financial market conditions and slowing global growth could make the Federal Reserve cautious about raising interest rates this year.

Minutes of the U.S. central bank’s Dec. 18-19 policy meeting published on Wednesday showed “many” officials were of the view that the Fed “could afford to be patient about further policy firming.”

The Fed has forecast two rate hikes this year. Fed Chairman Jerome Powell and several policymakers have said they would be patient and flexible in policy decisions this year.

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid fell 28,000 to 1.72 million for the week ended Dec. 29. The four-week moving average of the so-called continuing claims increased 15,250 to 1.72 million.

November’s wholesale inventories report from the Commerce Department’s Census Bureau, which was scheduled for release on Thursday, will not be published because of the government shutdown.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

U.S. private payrolls surge in December; weekly jobless claims rise

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. private payrolls increased by the most in nearly two years in December, suggesting sustained strength in the labor market despite ongoing financial market volatility.

While other data on Thursday showed the number of Americans filing applications for unemployment benefits increased more than expected last week, the underlying trend in claims remained low. Claims data tend to be volatile around year-end holidays.

Labor market data is being closely watched for signs of whether tightening financial conditions could be impacting on companies’ hiring decisions. A sharp stock market sell-off has stoked fears about the economy’s health.

The ADP National Employment Report showed private payrolls rose by 271,000 jobs last month after a downwardly revised 157,000 increase in November. Economists polled by Reuters had forecast private payrolls advancing 178,000 last month following a previously reported 179,000 increase in November.

The ADP report, which is jointly developed with Moody’s Analytics, was published ahead of the government’s more comprehensive employment report for December scheduled for release on Friday.

The ADP report has a spotty record predicting the private-payrolls component of the government’s employment report and last month’s jump probably exaggerates the strength of the labor market.

“The December ADP data have been especially unreliable because of the challenge of adjusting for ‘purging’ effects,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in White Plains, New York.

“December is typically when employers drop from their listings all individuals who have left their firms permanently,” he said. “Such workers are dropped from the government data when they are no longer being paid, but some employers keep former employees on their lists for ADP until year-end tax documents have been filed.”

According to a Reuters survey of economists, nonfarm payrolls likely increased by 177,000 jobs last month after rising 155,000 in November. The unemployment rate is forecast steady near a 49-year low of 3.7 percent, not too far from the Federal Reserve’s forecast of 3.5 percent by the end of 2019.

With the labor market viewed at being at or beyond full employment, the pace of job growth is slowing as employers struggle to find workers. Some of the moderation in employment gains has been attributed to the stock market rout.

The Fed raised interest rates last month for the fourth time in 2018, but forecast fewer rate hikes this year and signaled its tightening cycle is nearing an end in the face of financial market volatility and slowing global growth.

U.S. financial markets were little moved by the data.

In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 231,000 for the week ended Dec. 29. Data for the prior week was revised higher to show 5,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims increasing to 220,000 in the latest week.

The Labor Department said claims for California and Virginia were estimated last week. Unadjusted claims for both of those states declined last week.

A Labor Department official said there was no indication of an increase in filings last week from federal workers furloughed because of a partial shutdown of the government that is now in its second week.

Data on claims filed by federal employees is released with a one-week lag. The shutdown, which started on Dec. 22, was triggered by President Donald Trump’s demand for $5 billion in border wall funding.

Some 800,000 employees from the Departments of Homeland Security, Transportation, Commerce and others have been furloughed or are working without pay.

Claims data tends to be noisy around year-end holidays. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, slipped 500 to 218,750 last week.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Wall Street set to open higher as post-Christmas rally continues

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 27, 2018. REUTERS/Eduardo Munoz

By Medha Singh

(Reuters) – Wall Street was set to open slightly higher on Friday, extending a two-day rally amid volatile trading and raising hopes that the recent selloff may have eased for now.

The three main index futures rose more than 1 percent before paring some gains.

At 8:38 a.m. ET, Dow e-minis were up 0.43 percent. S&P 500 e-minis were up 0.38 percent and Nasdaq 100 e-minis were up 0.23 percent.

The final week of 2018 has seen wild swings in equities, with the CBOE Volatility Index, Wall Street’s main fear gauge, hitting its highest level since early February before easing slightly.

The benchmark S&P 500 tested its 20-month low early in the week and was at the brink of bear market territory before the three main indexes roared back with their biggest daily surge in nearly a decade on Wednesday and a late rally the following day.

On Thursday, the S&P fell as much as 2.8 percent but closed 0.8 percent higher as markets turned around late in the session.

In a sign of optimism on trade on Friday, China opened the door to imports of rice from the United States for the first time ever in the run-up to talks between the two countries in January.

“Yesterday’s reversal suggests the market has made a temporary bottom and we could probably rally well into the new year,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“In spite of the government shutdown, the market seems more concerned on trade talks, which are somewhat lifting the negative sentiment.”

Stocks could swing between gains and losses due to the volatility but end-of-the-year window dressing and investors looking to buy stocks at attractive valuations should end in a positive session, Cardillo said.

Heavyweight technology names including Microsoft Corp, Apple Inc and Amazon.com  – which were among the biggest boosts to Wall Street’s rally on Thursday – rose more than 0.5 percent in premarket trading.

Of the 30 Dow components, 29 were trading higher.

The three indexes are set to end the week with gains of more than 3 percent each, snapping three straight weeks of steep losses.

Still, the indexes are down more than 9 percent for December and remain on track for their biggest annual percentage drop since 2008.

Investors head into 2019 with a list of worries ranging from U.S.-China trade tensions, rising interest rates and a cooling economy to a partial U.S. government shutdown, which is now in its sixth day.

(Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva)

U.S. stocks attempt rebound

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 26, 2018. REUTERS/Jeenah Moon

By Medha Singh

(Reuters) – U.S. stocks were attempting a modest rebound on Wednesday, boosted by technology shares and an Amazon-led jump in retailers, following four sessions of steep losses that pushed the S&P 500 and Dow Industrials near bear market territory.

After a strong start, the S&P and Dow swung between gains and losses. At its session low, the S&P hit a fresh 20-month low and came within two points of entering bear market territory, measured by a drop of more than 20 percent from a closing high.

The gains were led by technology stocks, which rose 1.49 percent. Their 9.2 percent slump in the past four sessions was the steepest among the 11 major S&P sectors, while the S&P 500 tumbled 7.7 percent.

Amazon.com Inc jumped 4.02 percent after reporting a “record-breaking” season. The stock was giving the biggest boost to the S&P and Nasdaq and led the consumer discretionary index up 1.49 percent.

But investors anxieties were far from gone. President Donald Trump renewed his attack on the Federal Reserve on Christmas, blaming it for the market slump.

Trump also said the U.S. government shutdown, now in its fifth day, would last until his demand for funds to build a wall on the U.S.-Mexico border is met.

A little over 2,100 stocks on the New York Stock Exchange and the Nasdaq hit 52-week lows. That compares with at least 2,600 stocks breaching new lows in the past three sessions.

“The market doesn’t look so healthy. The concerns are government shutdown, the economy, the President – what time is he going to tweet out about Federal Reserve,” said Larry Benedict, founder of the Opportunistic Trader in Boca Raton, Florida.

“We’re seeing the same thing recently and it’s not really good. It opens up every day and it’s met by selling and it ends nearer the low or on the low than the high. For the market to make a bottom, you need a bit of capitulation or panic bottom.”

The S&P was up 24.41 points, or 1.04 percent, at 2,375.51, at 11:37 a.m. ET, a day after the Christmas holiday.

The Dow Jones Industrial Average was up 196.31 points, or 0.90 percent, at 21,988.51 and the Nasdaq Composite was up 98.42 points, or 1.59 percent, at 6,291.34.

Eight of the 11 S&P sectors were higher, with the defensive utilities. SPLRCU real estat and consumer staples flat to lower.

Energy stocks rose 1.8 percent as crude oil prices rebounded.

Retailers jumped 3.14 percent, led by Amazon after a Mastercard report showed U.S. holiday sales were the strongest in six years.

The heavy-weight FAANG group, Facebook Inc, Amazon, Apple Inc, Netflix Inc and Alphabet Inc, rose between 1 percent and 4 percent.

The S&P ended Monday 19.8 percent below its all-time closing high, with roughly three-fourths of its stocks already in a bear market.

The Dow finished Monday 18.9 percent lower than its closing high. The Nasdaq is already in bear market, along with the Dow Jones Transport Average and small-cap Russell 2000 index.

Advancing issues outnumbered decliners by a 1.70-to-1 ratio on the NYSE and a 1.89-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 194 new lows, while the Nasdaq recorded five new highs and 455 new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva)

Health insurers, hospital operators fall as Obamacare ruled unconstitutional

FILE PHOTO: A sign on an insurance store advertises Obamacare in San Ysidro, San Diego, California, U.S., October 26, 2017. REUTERS/Mike Blake

(Reuters) – Shares of health insurers, hospitals, and healthcare companies fell in early trading on Monday, after a federal judge ruled the Affordable Care Act (ACA), also known as Obamacare, unconstitutional late last week.

The ACA, introduced by former U.S. President Barack Obama in 2010 to provide affordable healthcare to all Americans, mandates that all individuals have health insurance or pay a tax.

But on Friday, Texas District Judge Reed O’Connor agreed with a coalition of 20 states that a change in tax law last year eliminating a penalty for not having health insurance invalidated the entire Obamacare law.

Centene Corp fell 7.8 percent to $117.5, while Molina Healthcare slumped 10.1 percent to $118.4. The companies are among health insurers with exposure to ACA.

WellCare Health Plans and Anthem Inc declined 4.7 percent and 2.1 percent, respectively.

“While we are disappointed in the recent Northern District of Texas court’s ACA ruling, we recognize that this is a first step in what will be a lengthy appeals process,” Molina Healthcare said.

“Regardless, the ACA will remain in effect for 2019, and we are optimistic that it will remain in effect thereafter.”

Brokerage Evercore ISI said it expected no immediate impact from the ruling, calling it only a declaratory judgment and not an injunction.

Even in case of an eventual injunction, the defendants would certainly seek and most likely get a stay pending appeal, Evercore said.

Hospitals and healthcare services providers Community Health Systems, Tenet Healthcare Corp and HCA Healthcare Inc fell between 4 percent and 8 percent.

(Reporting by Manogna Maddipatla in Bengaluru)

U.S. weekly jobless claims drop to near 49-year low

FILE PHOTO: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson

WASHINGTON (Reuters) – The number of Americans filing applications for jobless benefits tumbled to near a 49-year low last week, which could ease concerns about a slowdown in the labor market and economy.

Initial claims for state unemployment benefits dropped 27,000 to a seasonally adjusted 206,000 for the week ended Dec. 8, the Labor Department said on Thursday. Last week’s decline in claims was the largest since April 2015. Claims hit 202,000 in mid-September, which was the lowest level since December 1969.

Data for the prior week were revised to show 2,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims falling to 225,000 in the latest week. Claims shot up to an eight-month high of 235,000 during the week ended Nov. 24.

The Labor Department said only claims for Virginia were estimated last week.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,750 to 224,750 last week.

While difficulties adjusting the data around holidays likely boosted applications in prior weeks, there were concerns the labor market was losing some momentum given financial market volatility, the fading stimulus from a $1.5 trillion tax cut and the Trump administration’s protectionist trade policy.

Last week’s sharp drop in claims also suggests a slowdown in job growth in November was likely the result of worker shortages. Nonfarm payrolls increased by 155,000 jobs after surging by 237,000 in October.

With the unemployment rate near a 49-year low of 3.7 percent, Federal Reserve officials view the labor market as being at or beyond full employment.

The U.S. central bank is expected to raise interest rates at its Dec. 18-19 policy meeting. The Fed has hiked rates three times this year. Most economists expect the central bank will increase borrowing costs twice next year, although traders expect no more than one rate increase.

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid increased 25,000 to 1.67 million for the week ended Dec. 1.

The four-week moving average of the so-called continuing claims slipped 2,500 to 1.67 million.

(Reporting by Lucia Mutikani Editing by Paul Simao)

Fed’s Powell: U.S. economy performing ‘very well’ though benefits uneven

FILE PHOTO: Federal Reserve Board Chairman Jerome Powell speaks at his news conference after the two-day meeting of the Federal Open Market Committee (FOMC) on interest rate policy in Washington, U.S., June 13, 2018. REUTERS/Yuri Gripas/File Photo/File Photo/File Photo

(Reuters) – The U.S. economy is “performing very well overall,” Federal Reserve Chairman Jerome Powell said in remarks prepared for the opening of a rural housing conference in Washington.

The job market in particular “by many national-level measures…is very strong,” with unemployment at a 50-year low, Powell said, capping a week of widespread market nervousness with a reminder that the U.S. economy continues to expand.

Powell’s brief prepared statement did not address monetary policy or the Fed’s upcoming meeting, at which the central bank will decide whether to raise interest rates and will also release new economic projections for the coming year.

Powell noted to the Housing Assistance Council, a nonprofit that focuses on rural housing issues, that the benefits of the ongoing recovery have not spread evenly around the country but have been concentrated in major cities.

“Some communities have yet to feel the full benefits of the ongoing expansion,” Powell said, with double-digit unemployment still the norm in more than two dozen counties and nearly a third of rural homes without broadband internet.

(Reporting by Howard Schneider in Indianapolis; editing by Diane Craft)