USA economy is flexing its might, with unemployment benefit numbers at a 52-year low and industries humming

The number of Americans filing new jobless claims declined last week as labour demand remained robust, putting the economy on track for another month of healthy job gains. In early March, unemployment benefit rolls were the fewest in 52 years, according to the Labor Department’s weekly jobless claims report released on Thursday. Other statistics showed an uptick in factory production last month and a dramatic comeback in homebuilding, indicating the economy’s underlying resilience in the face of rising prices and geopolitical uncertainties.

The Federal Reserve hiked its policy interest rate by 25 basis points on Wednesday, the first increase in more than three years, and unveiled an aggressive strategy to drive borrowing prices to restrictive levels by 2023. Russia’s conflict against Ukraine, according to the US Federal Reserve, is “expected to exert extra upward pressure on inflation and impact on economic activity. “The Russian invasion of Ukraine adds some uncertainty to the forecast, since energy prices have jumped and business and consumer mood has suffered,” said Dante DE Antonio, senior economist at Moody’s Analytics in West Chester, Pennsylvania. “However, given the challenging employment climate that exists, we anticipate employers to look past the near-term volatility.”

For the week ending March 12, initial claims for state unemployment benefits fell 15,000 to a seasonally adjusted 214,000. Reuters polled economists, who predicted 220,000 applications for the most recent week. A 16,006 decrease in claims in New York offset significant increases in Michigan, California, and Ohio. Claims have fallen from a peak of 6.149 million in early April 2020. The three-week-old Russia-Ukraine war poses a risk to the US job market due to supply chain disruptions and record-high fuel prices. With firms desperate for workers, analysts believe the labor market and economy will weather the storm.

At the end of January, there were 11.3 million job opportunities, with a record 1.8 vacant positions for every jobless individual. This discrepancy between labour demand and supply is driving wage growth, which should give some relief to families as fuel costs rise. Fed Chair Jerome Powell described the job market as “very” tight on Wednesday, telling reporters that “we think this labour market, as I stated, can absorb tighter monetary policy, and the entire economy can as well.”

So far, the economy has held up well. According to a second study released by the Philadelphia Fed on Thursday, manufacturing activity in the mid-Atlantic area increased in March, with manufacturers reporting significant growth in both new orders and shipments. Factories in eastern Pennsylvania, southern New Jersey, and Delaware expanded employee hours and employed additional workers. They, on the other hand, continued to suffer with increasing input prices and material delays, which resulted in extended order backlogs. A third report from the Fed showed that manufacturing increased by 1.2 percent in February, despite motor vehicle output falling by 3.5 percent due to a global shortage of electronic components.

So far, the economy has held up. According to a second study released on Thursday by the Philadelphia Fed, manufacturing activity in the mid-Atlantic area surged in March, with manufacturers reporting significant growth in both new orders and shipments. Factories in the region spanning eastern Pennsylvania, southern New Jersey, and Delaware employed additional workers and extended working hours. They, on the other hand, continued to battle with increasing input prices and material delays, which kept order backlogs extended. A third Fed report showed that manufacturing increased by 1.2 percent in February, despite motor vehicle output falling by 3.5 percent due to a global scarcity of electronic components.

“The effect of Russia’s invasion of Ukraine might increase supply concerns, but our research implies fairly modest direct exposure for manufacturing,” said Shannon Seery, an economist at Wells Fargo in New York. Wall Street stocks were trading higher. The value of the dollar in relation to a basket of currencies decreased. Treasury prices in the United States increased.