Stronger jobs market helps US consumer confidence

An improving jobs market is doing wonders for US consumer confidence. The number of workers filing claims for jobless benefits fell by a more-than-projected 21,000 to 283,000 in the week ended February 14th, according to Labour Department data issued Thursday in Washington.

Another report showed households are more upbeat in February about the economic outlook than at any time in the past four years.

Americans have become more optimistic in recent months as fuel prices plunged, firings abated and payroll gains accelerated, making it more likely spending will strengthen.

Consumers will need to remain engaged to help the world’s largest economy overcome a slowdown in manufacturing, which is being held back by a rising dollar and sluggish growth overseas.

“The labour market is improving,” said Raymond Stone, managing director at Stone and McCarthy Research Associates in Princeton, New Jersey, who projected claims would fall to 285,000.

“It should be a positive for both consumer confidence and consumer spending.”

Coincidentally on Thursday, Wal-Mart Stores , long criticised for its low wages and employee benefits, said it would spend more than $1 billion to increase pay for half a million US employees this year.

The increase announced by the largest private sector employer in the United States will cover about 40 per cent of its US workforce, but falls far short of what some employment groups have been agitating for.

Wal-Mart said on Thursday its hourly full-time and part-time workers will earn at least $9.00 an hour, or $1.75 above the current federal minimum wage, starting in April. Current employees will earn at least $10.00 an hour by February 1st, 2016.

Employment groups, led by Our Walmart, have been calling for Wal-Mart to pay its workers at least $15 an hour.

Bloomberg/Reuters