According to Reuters, the amount of Americans filing for unemployment benefits rose last week that indicate a tightening labor market that may push the Federal Reserve to raise interest rates next month. The decrease in inventories have pushed analysts to cut their q2 GDP growth predictions.
"Businesses are wisely hoarding labor and not laying off workers because there are no skilled workers to fill these jobs at corporations and companies across the country," said Chris Rupkey, chief economist at MUFG Union Bank in New York.
Initially, jobless claims for state unemployment benefits have increased 1,000 to an adjusted 234,000 for the week ended on May 20th, said the Labor Department. The Fed policy meeting early May that was published this Wednesday displayed policymakers agreeing on postponing hiking rates until evidence of growth slowdown is more apparent.
"If the widening in the trade gap reported thus far in the quarter is sustained, trade would subtract about half a percentage point from second-quarter GDP growth," said John Ryding, chief economist at RDQ Economics in New York.