US labour market engine still purring along

<p>Kia ora,</p><p>Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the US labour market keeps on delivering positive momentum.</p><p>There were 195,000 <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20220579.pdf" target="_blank"><strong>new jobless claims</strong></a> in the US last week, low and taking the total people on these benefits down to 1.675 mln, and an all-time low in a record that goes back to the 1960s. Markets expect the March non-farm payrolls grown to be released tomorrow showing an increase of +490,000, a lower jobless rate, and higher pay.</p><p><a href="https://www.challengergray.com/blog/march-2022-job-cuts-jump-40-to-21387/" target="_blank"><strong>Job layoffs</strong></a> might have risen in March but they are at a tiny level still.</p><p>The bellwether <a href="https://chicago.ismworld.org/news-publications/reports/report-on-business/" target="_blank"><strong>Chicago PMI</strong></a> for March came in strongly after an outlier February dip, an expansion that remains impressive and supports the low labour stress data.</p><p>These labour pressures are contributing to inflation. But <a href="https://www.bea.gov/news/2022/personal-income-and-outlays-february-2022" target="_blank"><strong>personal spending rose</strong></a> +0.2% in February from January on an inflation-adjusted basis, but below analysts’ expectations of a +0.5% rise. But January was revised up to a surging +2.7%. The February result reflects an increase of +$94 bln in spending for services, namely food services and accommodations as Covid-19 infections from the Omicron variant faded. Meanwhile, spending on goods, mainly cars declined by -$59 bln. Yet, high inflation is likely to continue to weigh on spending in the coming months, forcing consumers to cut down on many items to afford more expensive petrol, rent and food. The