Weekly initial jobless claims increased 1to 202,000 for the week ended March 26, and increase of 14,000 from the previous week, according to the Labor Department. Continuing jobless claims reached a record high of 6.2 million in April 2020 and have now declined to 1.3 million, the lowest since December 27, 1969. Nonfarm payroll report on Friday is expected to show a smaller increase than in Feb.
Consumer spending growth slowed in February after the rising gasoline prices and surging rent forced consumers to cut other expenses. Spending rose 0.2% in February and January spending increase was revised higher to 2.7% from 2.1%. The personal consumption expenditure index increased 0.6% in February, an increase of 6.4% from a year ago, after rising at 0.5% in January.
High natural gas prices are likely to trend even higher as the U.S. regulators prepare to divert natural gas to Europe because additional supplies from Qatar are expected to lag till 2023. Russia is implementing ruble payment demand for imported natural gas. Germany, Holland, Greece, and Italy are making emergency arrangements in the event of supply interruptions.
Private sector added 455,000 jobs in March following revised 486,000 in February and totaling 1.45 million the first quarter, according to ADP monthly survey. Travel and hospitality added 161,000, education and health services added 72,000 and business services expanded by 61,000 net new jobs. Manufacturing added 54,000 jobs followed by construction adding 15,000.
The largest military budget in the world is likely to get even larger according to the latest budget proposal from the U.S. president. Of the $5.8 trillion budget proposed by President Biden, $795 billion is for military spending, higher than $770 billion in 2022, and $915 billion for domestic programs with the remainder for mandatory spending.