U.S. economic activity is showing some very good signs.
Jobless claims are dropping, factory activity is increasing, and economic factors are pointing upward — is this U.S. economy about to make a big move upward?
New U.S. applications for unemployment benefits dropped last week while economic activity showed resiliency in October, indicating that the Federal Reserve may move to raise interest rates sooner rather than later, according to a Reuters report.
Factory activity was up in the mid-Atlantic region after it had been declining for the last couple of months, a very good sign that would mean the manufacturing lag could be over with, something that was dragging down the economy.
And it’s not like things have been great around the world, with major economies worldwide struggling, indicating that the U.S. economy may be in such a strong position that it can handle it. China is battling with a slowdown and European growth remains slow, but yet the U.S. economy continues to chug along.
Claims for state unemployment benefits actually dipped 5,000 down to 271,000 for the week that ended on Nov. 14. Claims are now below 300,000 for 37 consecutive weeks now, a stretch last seen in the 1970s, and a strong indication that we have a healthy jobs market. In fact, it’s about the lowest that economists expect it to get even as the labor market approaches full employment.
The Fed policy-setting committee had a meeting on Oct. 27 and 28 which indicated that they were expecting an increase in the interest rates as soon as December, a long-awaited move that would put the Fed’s stamp of approval on the economy’s performance since the recession.