US Labour Market Remains Tight; Corporate Profits Decline

• There has been an increase in the unemployment claims that rose moderately last week showing no signs yet of a possible credit tightening affecting the public and the tight labour market. 
• However, the risks to the economy are mounting. Other data on Thursday 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 labour 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 by 7,000 to a seasonally adjusted 198,000 for the week ended March 25, the Labor 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 technology industry.
• The unemployment rate was at 3.6% in February. Labour market resilience is underpinning the economy, though clouds are gathering.

(Source: Reuters)