By Joyce Yu
Philadelphia, PA–Initial claims for state unemployment benefits dropped 41,000 to a seasonally adjusted 220,000 for the week ended Jan. 13, the lowest level in 45 years, the Labor Department said on Thursday, reinforcing a tight labor market.
The financial industry, however, seems to tell a different story. The nation’s six largest banks shrank their combined workforce at the fastest pace in two years during the final quarter of 2017, according to figures disclosed in earnings reports since Friday. About 8,000 people are getting left behind, based on Bloomberg’s calculations. Citigroup Inc. and Wells Fargo & Co. eliminated the most positions, while JPMorgan Chase & Co. and Goldman Sachs Group Inc. added some. The six firms have shed almost 150,000 jobs since the high-water mark in 2011. That amounts to a 12% cut as banks have sold off some units and look to automate more roles.
Separately, U.S. homebuilding fell more than expected in December, recording its biggest drop in just over a year, report from the Commerce Department showed. Following two months of hefty gains, construction of single-family housing units dropped sharply in December. While December’s moderation in homebuilding is likely to be temporary amid strong demand for housing, builders, indeed, continue to struggle with labor and land shortages as well as more expensive lumber. A survey on Wednesday showed confidence among homebuilders slipping from an 18-year high in January.
Wall Street moved away from record highs with mixed economic reports released today. “I think this is bullish,” said Bruce Bittles, chief investment strategist at Baird. “It shows the optimism is there, but it’s not exuberant.”
Over in Asia, led by an export recovery, China’s economy grew faster than expected in the fourth quarter of 2017, registering a year-on-year growth of 6.8%, higher than the 6.7% growth forecast by analysts in a Reuters’ poll. Growth for the 2017 full year picked up to 6.9 percent year-on-year, easily beating the government’s 2017 target of around 6.5%. This also marks China’s first annual acceleration in growth in seven years.
“China’s growth is very healthy,” Iris Pang, a Hong Kong-based Greater China economist at ING, told the Reuters. “The risks that we worried about in 2017, for example overcapacity cuts having a negative impact on GDP, did not happen because new sectors are actually coming out to help production to grow.”
