US labour market remains tight; corporate profits decline

News wire -- The number of Americans filing new claims for unemployment benefits rose moderately last week, showing no signs yet that tightening credit conditions were having a material impact on the tight labour market.

But the risks to the economy are mounting, according to Reuters report. Other data showed corporate profits in the fourth quarter declining by the most in five years, in part because of penalties and fines imposed on several businesses.

That included a $1.7 billion civil penalty against Wells Fargo for what the government said was to "settle allegations that it illegally assessed fees and interest charges on auto and car loans."

"The song remains the same for the labor market," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. "Layoffs remain at very low levels and the labour market remains extremely tight."

Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 198,000 for the week ended March 25, the Labour Department said. Economists polled by Reuters had forecast 196,000 claims for the latest week. Claims have stayed low despite high-profile layoffs in the

Coal mining site technology industry.

Economists attributed the low level in claims partly to seasonal adjustment factors, the model that the government uses to strip out seasonal fluctuations from the data, which they said could have been affected by the COVID-19 pandemic.

The Labour Department said seasonal factors for initial and the so-called continuing claims

Workers hiring

for 2023 as well as updated factors for 2018 through 2022 would be available.