By Joyce Yu
The number of Americans filing for unemployment benefits was unchanged in the week ended Dec. 23, underscoring a tightening labor market. U.S. workers filed 245,000 initial claims for state unemployment benefits during the week that ended Dec. 23, according to data published by the Labor Department on Thursday. This also marked the 147th straight week that claims remained below the 300,000 threshold, an indicator for a strong labor market, and is the longest such stretch since 1970.
The economy added 228,000 jobs in November, well above the roughly 100,000 jobs per month needed to keep up with growth in the working-age population. With the jobless rate at a 17-year low of 4.1 percent, the labor market is widely seen as near full employment which has in turn bolstered retail sales figures during the past holiday season.
Data from Mastercard SpendingPulse showed U.S. retail sales in the holiday period which tracks both online and in-store spending rose at their best pace since 2011. Sales, excluding automobiles, rose 4.9% from Nov. 1 through Christmas Eve, compared with a 3.7% gain in the same period last year. E-commerce, in particular, continued to drive the gains, rising 18.1%.
“It started with a bang in the week leading up to Black Friday,” Sarah Quinlan, a senior vice president of marketing insights at Mastercard, shared with the Dow Jones Newswires. She added that retailers benefited this year from Christmas Day falling on a Monday, giving shoppers a full weekend to scoop up last-minute purchases.
“Overall, this year was a big win for retail,” Ms. Quinlan said.
Analysts also said unlike in past years, when spending was driven by high-income shoppers, this holiday season more people crossed all income levels are more willing to spend, encouraged by rising wages and low unemployment.
“There is a lot more spending from the lower- and middle-income groups, while the upper-income groups are splurging,” the Dow Jones Newswires quoted comments from Chris Christopher, executive director of economic-research firm IHS Markit.
Shares of retailers outperformed the general market in December. Macy’s and Gap stocks, for example, have jumped 24% and 18%, respectively, in the past month, compared with a 3% gain in the S&P 500. On Wednesday, Wall Street closed slightly higher as advances in some major technology stocks offset losses in energy. But trading volumes remains light.
US stocks reached new heights in 2017 driven by strong economic growth and corporate earnings. Bullish investors expect the new tax law in the United States that lowers the tax burden on corporates could continue to fuel the rally in 2018.
“The strength of the market has been encouraging this year,” Neil Massa, senior equity trader at Manulife Asset Management in Boston, told the Reuters. “The trend has been higher all year and a lot of people have been waiting for a pullback to get into the market, but they never really had that opportunity, and that’s surprising.”
