Protest camps quiet as Gazans fast and fill sandbags

A Palestinian man reads the Koran inside a tent during the holy month of Ramadan, at a protest camp near the Israel-Gaza border in the central Gaza Strip May 17, 2018. REUTERS/Ibraheem Abu Mustafa

By Nidal al-Mughrabi

GAZA (Reuters) – Young men filled sandbags to prepare for future protests at encampments along Gaza’s Israeli border on Thursday, though tents were mostly empty as Palestinians joined Muslims around the world observing the daylight fast at the start of Ramadan.

After the bloodiest day for Palestinians in years on Monday, when 60 were killed by Israeli gunfire during mass demonstrations that Israel said included attempts to breach its frontier fence, calm and a heatwave descended on the area.

Organisers of the protests that began on March 30 set Friday as a day to honour the dead and urged Gazans to flock again to the tent cities. But Ramadan traditions – prayer, family visits and feasts – seemed to keep crowds away during the hot hours.

At one encampment, about 70 young men filled sandbags in anticipation of people returning to the protest sites.

“We are making a sand barrier so people can feel a bit safer,” one of the men said, declining to give his name.

Ramadan is usually a time of celebration, but after dozens of funerals during the week the mood was bleak in Gaza.

Israel’s intelligence minister, Israel Katz, said on Wednesday neighboring Egypt had put pressure on Hamas, the armed Islamist faction that controls the Gaza Strip, to scale back the protests.

Hamas denied it had come under Egyptian pressure to curb the protests, which provoked international condemnation of Israel’s deadly tactics in putting down the unrest. The organizing committee for the demonstrations said Muslims’ abstinence from food and drink during the hot mornings and afternoons of Ramadan would be taken into account in further protests.

The “March of Return” demonstrations advocate the return of Palestinians to lands lost to Israel during its founding in 1948, and are also intended to draw attention to harsh conditions in Gaza, where the economy has collapsed under an Israeli-Egyptian blockade since Hamas took power in 2007.

Israel, with U.S. backing, says Hamas is behind the protests, deliberately provoking violence for propaganda aims. Hamas says the demonstrations are a popular outpouring of anger, and Israel carried out a “massacre” in response.

ISRAELI AIR STRIKE

Dawoud Shehab, a member of the organizing committee, said activities at the encampments would get under way only in the late afternoon when temperatures drop. Late-night prayers will also be held there, he said.

“The marches are continuing and there are calls on people to gather in mass on Friday in a day we have dedicated to glorifying the martyrs,” Shehab told Reuters.

The message was echoed in appeals blared by loudspeakers on vehicles that drove into Gaza neighborhoods to urge people to turn out. Organisers said the protest would stretch into June.

Violence along the border has been comparatively limited over the past two days, with no casualties reported by either side since Tuesday, when two Palestinians were killed while dozens of others were buried.

Early on Thursday, Israeli aircraft hit four Hamas targets in the northern Gaza Strip in response to heavy machine gun fire that struck houses in the Israeli town of Sderot, the Israeli military said.

Israel and Hamas have fought three wars in the past decade since Gaza fell under control of the militant group that denies Israel’s right to exist. Israel and Egypt say their de facto blockade of the strip is necessary for security reasons.

The World Bank says it has driven Gaza to economic collapse, with one of the highest unemployment rates in the world. Eighty percent of Gaza’s 2 million people are now dependent on aid.

(Writing by Jeffrey Heller in Jerusalem; Editing by Peter Graff)

U.S. job growth picks up; unemployment rate drops to 3.9 percent

A help wanted sign is posted at a taco stand in Solana Beach, California, U.S., July 17, 2017. REUTERS/Mike Blake

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job growth increased less than expected in April and the unemployment rate dropped to near a 17-1/2-year low of 3.9 percent as some out-of-work Americans left the labor force.

The Labor Department’s closely watched employment report on Friday also showed wages barely rose last month, which may ease concerns that inflation pressures are rapidly building up, likely keeping the Federal Reserve on a gradual path of monetary policy tightening.

“Fed officials can rest easy that there is not any wage-based inflation on the horizon,” said Chris Rupkey, chief economist at MUFG in New York. “There is no need to speed up the path of interest rates because inflation isn’t heating up in a worrisome manner.”

Nonfarm payrolls increased by 164,000 jobs last month, the Labor Department reported. Data for March was revised up to show the economy adding 135,000 jobs instead of the previously reported 103,000. That was the fewest amount of jobs created in six months and followed an outsized gain of 324,000 in February.

While cold weather in March and April probably held back job growth, hiring is moderating as the labor market hits full employment. Employers, especially in the construction and manufacturing sectors, are increasingly reporting difficulties finding qualified workers.

The drop of two-tenths of a percentage point in the unemployment rate from 4.1 percent in March pushed it to a level last seen in December 2000 and within striking distance of the Fed’s forecast of 3.8 percent by the end of this year. It was the first time in six months that the jobless rate dropped.

But 236,000 people left the labor force in April, adding to the 158,000 who quit in March. The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell to 62.8 percent last month from 62.9 percent in March. It was the second straight monthly drop in the participation rate.

Economists polled by Reuters had forecast payrolls to rise by 192,000 jobs in April and the unemployment rate to fall to 4.0 percent. Average hourly earnings rose 0.1 percent last month after a 0.2 percent gain in March. That left the annual increase in average hourly earnings at 2.6 percent.

The dollar shrugged off the employment data, rising to its highest level this year against a basket of currencies. Prices of U.S. Treasuries fell and U.S. stocks rose.

Sluggish wage growth and a slowdown in hiring threaten to undercut the Trump administration’s argument that its $1.5 trillion income tax cut package, which came into effect in January and is highlighted by a sharp drop in the corporate income tax rate, would boost wages and hiring.

Companies like Apple have used their tax windfall for share buybacks and dividends.

President Donald Trump cheered the drop in the unemployment rate on Friday.

“I thought the jobs report was very good. The big thing to me was cracking 4,” Trump told reporters. “That hasn’t been done in a long time … we’re at full employment. We’re doing great.”

Democrats, however, reiterated their criticism of the tax cuts, saying more than $390 billion in share buybacks had been announced since the passage of the tax bill.

“President Trump promised American families that they would see a $4,000 annual raise after the tax plan, so far, average weekly wages have increased $11.69,” Democratic Senator Martin Heinrich said.

‘SUSTAINABLE PACE’

But average hourly earnings could be understating wage inflation. The Employment Cost Index, widely viewed by policymakers and economists as one of the better measures of labor market slack, showed wages rising at their fastest pace in 11 years during the period.

Inflation is flirting with the Fed’s 2 percent target.

The Fed’s preferred inflation measure, the personal consumption expenditures price index excluding food and energy, was up 1.9 percent year-on-year in March after a 1.6 percent rise in February.

The U.S. central bank on Wednesday left interest rates unchanged and said it expected annual inflation to run close to its “symmetric” 2 percent target over the medium term.

Economists interpreted symmetric to mean policymakers would not be too concerned with inflation overshooting the target. The Fed hiked rates in March and has forecast at least two more increases for this year.

Economists expect the unemployment rate will drop to 3.5 percent by the end of the year. Monthly job gains have averaged about 200,000 this year, more than the roughly 120,000 needed to keep up with growth in the working-age population. Though the decline in the labor force accounted for the drop in the unemployment rate last month, labor market slack is diminishing.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to 7.8 percent last month, the lowest level since July 2001, from 8.0 percent in March.

Construction payrolls rebounded by 17,000 jobs last month after recording their first drop in eight months in March. Manufacturing employment increased by 24,000 jobs in April after a gain of 22,000 positions in March.

Payrolls for temporary help, seen as a harbinger of future permanent hiring, rose by 10,300 after falling by 2,100 in March. There was a modest gain in leisure and hospitality employment while wholesale traders laid off workers.

Government payrolls fell 4,000 in April amid a decline in education employment at state governments.

“The moderation in job gains over the past two months may mark the beginning of the slow deceleration to a sustainable pace of job gains, which we estimate to be around or a little below 100,000 per month,” said Michael Feroli, an economist at JPMorgan in New York.

(Reporting by Lucia Mutikani; Additional reporting by Roberta Rampton; Editing by Paul Simao)

An economy in ruins leaves Gazans with hard choices

Palestinians stand at their house in the northern Gaza Strip February 12, 2018. REUTERS/Mohammed Salem

By Nidal al-Mughrabi

GAZA (Reuters) – The man who makes crisps, chocolate and vanilla snacks for Gaza had just finished explaining how his business was going through the worst economic crisis of his life when the lights went out, shutting down his factory. Again.

Wael Al-Wadiya has been running his food manufacturing business since 1985 – in a Gaza Strip that was very different from the one in which he and two million other Palestinians now live.

Back then Israeli settlers were still in Gaza, the Islamist militant group Hamas did not yet exist, and Palestinians were still two years away from the first of the uprisings against Israeli military occupation that introduced the word ‘Intifada’ to the world.

Sitting in a slowly declining industrial estate near the fortified border with Israel, the 51-year-old confectioner says that Gaza has been brought to a near-standstill by a decade of Israeli-led blockades, and internal Palestinian divisions.

“The situation is very miserable. People’s ability to buy has fallen to a minimum, therefore our businesses and businesses in Gaza are suffering as never before,” said Wadiya.

Palestinians work at Wael Al-Wadiya's snacks and chips factory, east of Gaza City February 19, 2018. REUTERS/Mohammed Salem

Palestinians work at Wael Al-Wadiya’s snacks and chips factory, east of Gaza City February 19, 2018. REUTERS/Mohammed Salem

He has cut production by 70 percent and wages by 30 percent. Employees who used to work each day now may work one day in three. “Unless a miracle happens, factories and companies will close down and it will be the real death of the economy,” he said.

There has long been poverty in Gaza, but with unemployment now at 43.6 percent, according to the Palestinian Bureau of Statistics, even once-wealthy merchants are defaulting on debts, causing other businesses to collapse, like dominoes.

Many in Gaza blame Israel for the hardships, accusing it of placing an economic blockade on the enclave that has drastically reduced the movement of people and goods.

But Gazans also fault their own leaders, complaining of a power struggle between Hamas, the armed group that seized military power in Gaza in 2007, and Fatah, the secular party of Western-backed Palestinian President Mahmoud Abbas.

Both Hamas and Fatah levy taxes. Both run competing bureaucracies. And even electricity has become a tool of political power – until recently the blackouts that plagued Wadiya’s factory were exacerbated by Abbas cutting money for Israeli current for Gaza.

Fatah says Hamas exploits money it collects from electricity consumers for its own purposes.

Israel, which pulled its settlers and soldiers out of Gaza in 2005, says it has been forced to control access to and from the territory to stop Hamas sending out gunmen and bombers, and from smuggling in weapons or material to make them.

The Israeli military says that it carries out “constant calculated risk management” between allowing humanitarian aid through to Gazans, while contending with Hamas, which “attempts to exploit the aid intended for Gaza’s civilian residents”.

 

POVERTY AND SECURITY

A combination of war, isolation, and internal rivalries has left Gaza in its current state.

Last year Abbas cut the salaries of 60,000 government employees in Gaza by 30 per cent, leaving them with little to spend in shops and markets after paying off bank loans. The sums of bounced checks in Gaza nearly doubled from $37 million to $62 million between 2015 and 2016, and then again to $112 million in 2017, according to the Palestinian Monetary Authority.

This lack of buying power contributed to a drop in imports through the one remaining commercial crossing with Israel, with just 350 truckloads per day compared with 800 in the last quarter of 2017.

Palestinian children play as a girl held by her mother looks out of the window of house in the northern Gaza Strip February 12, 2018. REUTERS/Mohammed Salem

Palestinian children play as a girl held by her mother looks out of the window of house in the northern Gaza Strip February 12, 2018. REUTERS/Mohammed Salem

Some merchants took a religious initiative in December in which they offered to write off customers’ debts using the hashtag ‘Sameh Toajar’ – ‘Forgive, and Be rewarded (by God).’

It was supported by Hamas and other factions, but the scale of the debts was too great for such a small-scale remedy.

“Gaza has gone into clinical death and is in need of root solutions, real and sustainable, and not temporary or short-lived solutions,” said Maher al-Tabba, a Gaza economist.

At the other end of the economic scale from the merchants are Suhaib, Shadi and Ahmed al-Waloud, who scavenge through garbage near their home in northern Gaza searching for plastic to sell to recycling plants.

Their father was one of the Gazans who lost their jobs in Israel more than a decade ago when Israel closed the door to thousands of Palestinian workers following Hamas’s seizure of control.

“I have been used to doing this job since I was a child,” said Suhaib, 19, from Beit Lahiya. But they now earn just enough to “stay alive,” he said, because the price paid for second-hand plastic has fallen by 80 per cent. “Nowadays there is not much work. People are not throwing away a lot of plastic.”

The question that dominates Gaza is whether hard times will make Palestinians more inclined to support attacks on Israel, or less so, because they fear reprisals.

 

Ali al-Hayek, the chairman of the Palestinian Businessmen Association in Gaza, said that total collapse of the economy would lead to instability that would be in nobody’s interests.

“Gaza is living through a real humanitarian crisis,” he said. “An economic collapse will lead to a security collapse that will cause trouble for the international community and for Israel.”

(Reporting by Nidal al-Mughrabi Writing by Stephen Farrell, Editing by William Maclean)

A decade after recession, a jump in U.S. states with wage gains for American workers

Newly hired employees take a break from training to pose for a group photo at the chain’s soon-to-open 54th outlet in Oakland, California ,U.S., January 24, 2018.

By Ann Saphir, Jonathan Spicer and Howard Schneider

OAKLAND, Calif./CANTON, N.Y./WASHINGTON (Reuters) – The kind of pay raises for which American workers have waited years are now here for a broadening swath of the country, according to a Reuters analysis of state-by-state data that suggests falling unemployment has finally begun boosting wages.

Average pay rose by more than 3 percent in at least half of U.S. states last year, up sharply from previous years. The data also shows a jump in 2017 in the number of states where the jobless rate zeroed in on record lows, 10 years after the financial crisis knocked the economy into a historic recession.

The state-level data could signal an inflection point muffled by national statistics.

Over the past four years, the U.S. economy added 10 million jobs and the overall unemployment rate fell to its lowest level since 2000. Yet wages have disappointed.

The disconnect has puzzled economists at the Federal Reserve, frustrated politicians concerned about rising inequality, and held regular Americans back, even as businesses have benefited and stock markets have surged, particularly in the first year of U.S. President Donald Trump’s presidency.

Trump says his tax cuts and regulation rollbacks are lifting business sentiment, and in an upbeat address to Congress on Tuesday, he said Americans “are finally seeing rising wages” after “years and years” of stagnation.

Indeed, average hourly earnings were up 2.9 percent in January year-on-year, the biggest rise in more than 8-1/2 years but still less than the 3.5 percent to 4 percent economists say would be a sign of a healthy economy.

The Reuters analysis and interviews with businesses across the country do show wage increases in industries ranging from manufacturing to technology and retail. Executives are mixed, however, on how much to credit Trump after several years of job growth that has chopped nearly six percentage points from the unemployment rate since its peak of 10 percent at the height of the 2007-2009 recession.

“Everyone in the building knows that they can leave and make more money,” said Michael Frazer, president of Frazer Computing, which provides software to U.S. used-car dealers from its offices in northern New York state. In response he raised wages by 6.1 percent at the end of 2017, up from 3.7 percent the previous year.

In Portland, Oregon, software provider Zapproved now hires coding school graduates and spends up to three months training them because the experienced software developers it used to hire have become too expensive. And still, CEO Monica Enand says she gives her developers twice-yearly raises “to make sure we are in the market for pay.”

JOBLESS RATES AT RECORD LOWS

The Reuters analysis of the most recent data available found that in half of the 50 states, average hourly pay rose by more than 3 percent last year. That’s up from 17 states in 2016, 12 in 2015, and 3 in 2014. Average weekly pay rose in 30 states, also up sharply from prior years, the analysis showed.

Unemployment rates are near or at record lows in 17 states, including New York, up from just five in 2016, the Reuters analysis shows.

“Wage growth tends to accelerate when the unemployment rate gets really strong,” said Bart Hobijn, an economics professor at Arizona State University.

California, Arkansas, and Oregon were among those both notching 3-percent-plus wage gains and plumbing record-low unemployment rates. This broadening of benefits to U.S. workers comes as robust global growth pushes up wages from Germany to Japan.

New York Fed President William Dudley said last month that firmer wage gains in states with lower unemployment rates gave him confidence that U.S. inflation, long stubbornly low, would soon rise.

In California, home of Noah’s New York Bagels, more than half of its 53 stores now pay their new hires more than the legal minimum wage, twice as many as in mid-2017.

“It’s very challenging to find enough people” in low-unemployment areas like the San Francisco Bay Area, said Noah’s president Tyler Ricks, who expects to hike pay further this year even as he opens five new stores.

To be sure, some states like Idaho with very low unemployment continue to have slow wage growth, while some like Delaware with very strong wage growth still have jobless rates well above their record lows.

And the share of gross domestic product that feeds back to labor as compensation has only edged slightly higher this decade, after generally declining since the 1970s, suggesting workers have a long way to make up ground.

Yet the state-level data hints at a first step.

Galley Support, a Sherwood, Arkansas-based manufacturer of latches for airplane kitchens and toilets, gave unskilled workers as much as a 20 percent pay hike last year. CEO Gina Radke said it will sap profit but with the Trump administration’s business-friendly policies set to benefit aircraft companies like Boeing, she added, “We feel confident that we will see an increase in sales to cover the increase in wages.”

Work-site managers at Gray, a company that oversees the building of factories and other projects from its headquarters in Lexington, Kentucky, also got a 20 percent raise since 2016. Yet a paycheck of up to $200,000 a year, plus bonuses, often isn’t enough to fill all the jobs on offer.

“There is just so much work around for people that it’s just hard to lure them away,” said Susan Brewer, Gray’s vice president of human resources.

(Reporting by Ann Saphir in Oakland, Calif., Jonathan Spicer in Canton, New York and Howard Schneider in Washington; Editing by Andrea Ricci)

Iran stages pro-government rallies, cleric urges firm punishment for protest leaders

By Parisa Hafezi

ANKARA (Reuters) – Tens of thousands of government supporters rallied across Iran on Friday, swearing allegiance to the clerical establishment and accusing arch enemy the United States of instigating the largest anti-government protests in nearly a decade, state TV reported.

Tehran’s Friday prayer leader called on authorities to deal “firmly” with those responsible for igniting over a week of illegal rallies, in which 22 people were killed and more than 1,000 people were arrested, according to Iranian officials.

“But those ordinary Iranians who were deceived by these American-backed rioters should be dealt with based on Islamic clemency,” cleric Ahmad Khatami told worshippers at Tehran university, TV reported.

Khatami also called on the government to “pay more attention to people’s economic problems.”

The anti-government rallies erupted on December 28 in Iran’s holy Shi’ite city of Mashhad after the government announced plans to increase fuel prices and dismantle monthly cash handout to lower-income Iranians.

The protests spread to more than 80 cities and rural towns, staged by thousands of young and working class Iranians angry about official corruption, unemployment and a deepening gap between rich and poor.

The authorities have produced no evidence of U.S. involvement in the protests, which lacked a unifying leader.

GUARDS QUELLED UNREST

But in Moscow, Russian Deputy Foreign Minister Sergei Ryabkov said Iran’s statements that external influences fomented the unrest were not groundless and Washington used any possible method to destabilize governments it disliked.

He added that U.S. calls for an extraordinary meeting of the U.N. Security Council to discuss the turmoil in Iran interfered with the country’s sovereignty, news agency Interfax said. The Council will meet on Friday at 3 p.m. (2000 GMT) to discuss Iran, Council president Kazakhstan has said.

Residents contacted by Reuters in various cities said the protests had shown sign of abating since Thursday, after the establishment intensified a crackdown on the protesters by dispatching Revolutionary Guards forces to several provinces.

Iran’s elite Guards and its affiliated Basij militia suppressed the country’s 2009 unrest over alleged election fraud, in which dozens of pro-reform Iranians were killed.

Iranian officials said the protests were the result of foreign instigation and mocked U.S. President Donald Trump’s support of protesters against what he called a “brutal and corrupt” establishment.

On Friday rallies, protesters chanted “Death to America” and “Death to Israel”, carrying pictures of Iran’s top authority Supreme Leader Ayatollah Ali Khamenei, and waved Iranian flags.

Television footage of rallies in several cities showed people chanting “We support Imam Khamenei … We will not leave him alone in his fight against enemies”.

“Demonstrators demand the punishment of those behind foreign-linked riots which insulted religion and our authorities,” state television reported, referring to the anti-government protests in which social media footage showed protesters tearing down pictures of Khamenei.

Khatami also called on the government to “pay more attention to people’s economic problems.”

UNITED FRONT

To allay tension, the government has suspended its plans to cut cash handouts and increase fuel prices.

“There are workers who say they have not received their salaries for months … These problems should be resolved,” Khatami said, according to state TV.

Fearing that further unrest could undermine the Islamic republic altogether, Iran’s faction-ridden political elite has displayed a united front.

But Khamenei and his hardline allies have criticized Rouhani for failing to revive the economy after most sanctions on Iran were lifted in 2016 under a nuclear deal reached between Tehran and major powers aimed at curbing the country’s nuclear program.

Rouhani secured the deal in 2015, raising hopes of better economic times among many Iranians, but discontent has since risen over the lack of broad improvement in living standards.

(Writing by Parisa Hafezi, Editing by William Maclean)

U.S. jobless claims unexpectedly rise; import prices up modestly

U.S. jobless claims unexpectedly rise; import prices up modestly

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits unexpectedly rose last week in part as a backlog of applications from Puerto Rico continued to be processed, but the underlying trend pointed to tightening labor market conditions.

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 249,000 for the week ended Nov. 11, the Labor Department said on Thursday. It was the second straight weekly increase.

The claims backlog in Puerto Rico is being cleared as some of the infrastructure damaged by hurricanes Irma and Maria is restored. Economists polled by Reuters had forecast claims falling to 235,000 in the latest week.

A labor department official said while the backlog in Puerto Rico was being processed, claims-taking procedures continued to be severely disrupted in the Virgin Islands.

Last week marked the 141st straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was smaller.

The labor market is near full employment, with the jobless rate at a 17-year low of 4.1 percent. 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 6,500 to 237,750 last week.

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

The low level of claims suggests strong job growth despite hurricane-related disruptions in September. Employment gains could, however, slow as companies struggle to find qualified workers, which economists expect will boost sluggish wage growth.

The claims report also showed the number of people still receiving benefits after an initial week of aid dropped 44,000 to 1.86 million in the week ended Nov. 4, the lowest level since December 1973. The four-week moving average of the so-called continuing claims fell 9,000 to 1.89 million, the lowest reading since January 1974.

In another report on Thursday, the Labor Department said import prices gained 0.2 percent last month as an increase in the cost of imported petroleum and capital goods was offset by a decline in food prices. That followed a 0.8 percent jump in September.

In the 12 months through October, import prices increased 2.5 percent, slowing after a 2.7 percent rise in September.

Last month, prices for imported petroleum increased 1.7 percent after surging 6.3 percent in September. Import prices excluding petroleum edged up 0.1 percent after shooting up 0.4 percent the prior month. Import prices excluding petroleum rose 1.4 percent in the 12 months through October.

A weak dollar, which has this year lost 5.4 percent of its value against the currencies of the United States’ main trading partners, could keep import prices outside petroleum supported.

Imported capital goods prices rose 0.2 percent last month, while the cost of imported food fell 0.2 percent.

The report also showed export prices were unchanged in October as the biggest monthly increase in the price of agricultural exports in nearly 1-1/2 years was eclipsed by a drop in nonagricultural prices. Export prices rose 0.7 percent in September. They increased 2.7 percent year-on-year last month after rising 2.8 percent in September.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Jobless claims rise more than expected as hurricane backlog clears

Jobless claims rise more than expected as hurricane backlog clears

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits rose more than expected last week, suggesting that claims processing disrupted by recent hurricanes has begun to improve.

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 239,000 for the week ended Nov. 4, the Labor Department said on Thursday. Claims had fallen to 229,000 in the prior week, near a 44-1/2-year low, and remain well below the 300,000 level generally regarded as signaling a healthy labor market.

Economists polled by Reuters had forecast claims rising to 231,000 in the latest week. They have declined from an almost three-year high of 298,000 hit at the start of September in the aftermath of hurricanes that ravaged parts of Texas, Florida, Puerto Rico and the Virgin Islands.

The Labor Department noted that it is now processing backlogged claims in Puerto Rico though its operations in the Virgin Islands remain severely disrupted.

Last week marked the 139th straight week that claims remained below the 300,000 threshold. That is the longest such stretch since 1970, when the labor market was smaller.

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 1,250, to 231,250 last week, the lowest level since March 31, 1973. That suggests ongoing job growth in an economy many regard as near full employment.

The so-called continuing claims rose 17,000 to 1.90 million. Economists polled by Reuters had expected continuing claims of 1.89 million.

The four-week moving average of continuing claims fell 750, to 1.90 million, the lowest level since Jan. 12, 1974, suggesting a continued decline in labor market slack.

(Reporting by Howard Schneider; Editing by Andrea Ricci)

U.S. jobless claims hit more than 44-year low

U.S. jobless claims hit more than 44-year low

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits dropped to its lowest level in more than 44 years last week, pointing to a rebound in job growth after a hurricane-related decline in employment in September.

The labor market outlook was also bolstered by another report on Thursday showing a measure of factory employment in the mid-Atlantic region rising to a record high in October. The signs of labor market strength could cement expectations that the Federal Reserve will raise interest rates in December.

Initial claims for state unemployment benefits fell 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 14, the lowest level since March 1973, the Labor Department said.

But the decrease in claims, which was the largest since April, was probably exaggerated by the Columbus Day holiday on Monday.

Claims are declining as the effects of Hurricanes Harvey and Irma wash out of the data. The hurricanes, which lashed Texas and Florida, boosted claims to 298,000 in early September.

A Labor Department official said claims for the Virgin Islands and Puerto Rico continued to be impacted by Irma and Hurricane Maria, which destroyed infrastructure. As a result the Labor Department continued to estimate claims for the islands.

Nonfarm payrolls dropped by 33,000 jobs in September as Hurricanes Irma and Harvey left more than 100,000 restaurant workers temporarily unemployed. The Virgin Islands and Puerto Rico are not included in nonfarm payrolls.

Economists had forecast claims falling to 240,000 in the latest week. The dollar pared losses against a basket of currencies after the data, while prices for U.S. Treasuries were unchanged.

LABOR MARKET TIGHTENING

Last week marked the 137th consecutive week that claims remained below the 300,000 threshold, which is associated with a strong labor market.

That is the longest such stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the jobless rate at a more than 16-1/2-year low of 4.2 percent.

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 9,500 to 248,250 last week.

The claims data covered the survey week for October nonfarm payrolls. The four-week average of claims fell 20,500 between the September and October survey periods, supporting views of a rebound in job growth this month.

In a separate report on Thursday, the Philadelphia Fed said its measure of factory employment in the mid-Atlantic region soared 24 points to a record high reading of 30.6 in October.

The average workweek index also increased 8 points to a reading of 19.4. It said no firms reported decreases in employment this month. The robust labor market readings helped to lift the Philadelphia Fed’s current manufacturing activity index four points to a five-month high of 27.9 in October, offsetting declines in new orders and shipments measures.

The claims report also showed the number of people still receiving benefits after an initial week of aid decreased 16,000 to 1.89 million in the week ended Oct. 7, the lowest level since December 1973.

The so-called continuing claims have now been below the 2 million mark for 27 straight weeks, pointing to diminishing labor market slack. The four-week moving average of

continuing claims dropped 22,750 to 1.91 million, the lowest level since January 1974. That was the 25th consecutive week that this measure remained below the 2 million market.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. jobless claims fall to more than one-month low

Pedestrians pass a sign advertising a sale and a job opening at a shop on Newbury Street in Boston, Massachusetts, U.S., October 11, 2017. REUTERS/Brian Snyder

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits fell to more than a one-month low last week as claims in Texas and Florida continued to decline after being boosted by Hurricanes Harvey and Irma.

Initial claims for state unemployment benefits decreased 15,000 to a seasonally adjusted 243,000 for the week ended Oct. 7, the lowest level since late August, the Labor Department said on Thursday. Data for the prior week was revised to show 2,000 fewer applications received than previously reported.

A Labor Department official said Harvey and Irma along with Hurricane Maria affected claims for Texas, Florida, South Carolina, Puerto Rico and the Virgin Islands. In addition, claims for Virginia were estimated.

Economists polled by Reuters had forecast claims falling to 251,000 in the latest week. Claims have been declining since surging to an almost three-year high of 298,000 at the start of September as workers displaced by the hurricanes were left temporarily unemployed.

As a result of Harvey and Irma, nonfarm payrolls dropped by 33,000 jobs last month, the first decrease in employment in seven years. A rebound in job growth is expected in October, boosted by the return of the dislocated workers as well as the start of rebuilding and clean-up efforts in storm-ravaged areas.

Underscoring the labor market’s underlying strength, claims have now been below the 300,000 threshold, which is associated with a robust labor market, for 136 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller.

The labor market is near full employment, with the jobless rate at more than a 16-1/2-year low of 4.2 percent.

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 9,500 to 257,500 last week.

The claims report also showed the number of people still receiving benefits after an initial week of aid dropped 32,000 to 1.89 million in the week ended Sept. 30, the lowest level since December 1973.

The so-called unadjusted continuing claims for Texas and Florida fell, suggesting some of the workers affected by Harvey and Irma had returned to their jobs. The unemployment rate among people receiving jobless benefits fell one-tenth of a percentage point to 1.3 percent.

Overall continuing claims have now been below the 2 million mark for 26 straight weeks, indicating that labor market slack continues to diminish. The four-week moving average of continuing claims fell 11,500 to 1.93 million, remaining below the 2 million level for the 24th consecutive week.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

U.S. second-quarter economic growth revised higher; jobless claims rise

FILE PHOTO: Customers shop at a Whole Foods store in New York City, U.S., August 28, 2017. REUTERS/Brendan McDermid/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. economy grew a bit faster than previously estimated in the second quarter, recording its quickest pace in more than two years, but the momentum probably slowed in the third quarter as Hurricanes Harvey and Irma temporarily curbed activity.

Gross domestic product increased at a 3.1 percent annual rate in the April-June period, the Commerce Department said in its third estimate on Thursday. The upward revision from the 3.0 percent rate of growth reported last month reflected a slightly faster pace of inventory investment.

Growth last quarter was the quickest since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period. Economists had expected that the second-quarter GDP growth rate would be unrevised at 3.0 percent.

Harvey, which struck Texas, has been blamed for much of the decline in retail sales, industrial production, homebuilding and home sales in August. Further weakness is anticipated in September after Irma slammed into Florida early this month.

Rebuilding is, however, expected to boost GDP growth in the fourth quarter and in early 2018. Estimates for the growth rate in the July-September period are just above 2.2 percent.

However, they could be raised after another report from the Commerce Department on Thursday showed a decline in the goods trade deficit in August as well as large increases in both retail and wholesale inventories.

Harvey and Irma continue to impact the labor market and are expected to cut into job growth this month. In a third report, the Labor Department said initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 272,000 for the week ended Sept. 23.

Still, the labor market remains strong. Claims have now been below the 300,000 threshold, which is associated with a robust labor market, for 134 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller.

Prices for U.S. Treasuries held losses after the data and the dollar <.DXY> fell to a session low against a basket of currencies. U.S. stock index futures were trading lower.

ROBUST CONSUMER SPENDING

With GDP accelerating in the second quarter, the economy grew 2.1 percent in the first half of 2017. Still, economists believe growth this year will not breach President Donald Trump’s ambitious 3.0 percent target.

Trump on Wednesday proposed the biggest U.S. tax overhaul in three decades, including lowering the corporate income tax rate to 20 percent and implementing a new 25 percent tax rate for pass-through businesses such as partnerships to boost the economy.

But the plan gave few details on how the tax cuts would be paid for without increasing the budget deficit and national debt, setting up what is expected to be a bruising battle in the U.S. Congress.

Growth in consumer spending, which makes up more than two-thirds of the U.S. economy, was unrevised at a 3.3 percent rate in the second quarter as an increase in spending on services was offset by a downward revision to durable goods outlays. Consumer spending in the second quarter was the fastest in a year.

Amid robust consumer spending, businesses accumulated a bit more inventory than previously reported to meet the strong demand. Inventory investment added just over one-tenth of a percentage point to GDP growth in the second quarter. It was previously reported to have been neutral.

Growth in business spending on equipment was unchanged at a rate of 8.8 percent, the fastest pace in nearly two years.

Investment on nonresidential structures was revised to show it increasing at a 7.0 percent pace, up from the previously reported 6.2 percent rate.

Both export and import growth were revised slightly lower. Trade contributed two-tenths of a percentage point to GDP growth last quarter. Housing was a slightly bigger drag on growth in the last quarter than previously reported, subtracting 0.3 percentage point from output.

The government also sharply revised down growth in corporate profits for the second quarter. Profits after tax with inventory valuation and capital consumption adjustments increased at a 0.1 percent rate instead of the previously reported 0.8 percent pace.

(Reporting by Lucia Mutikani; Editing by Paul Simao)