Live News: US data signals economic resilience amid Fed rate hikes

The US economy continued to show signs of resilience according to the latest jobless claims and GDP data, potentially complicating the Federal Reserve’s plans to slow the pace of its monetary tightening campaign as it combats elevated inflation.

According to data from the Labor Department, initial jobless claims rose slightly to 216,000 on a seasonally adjusted basis for the week ended December 17, from a revised 214,000 the week before. But that was still fewer than the 222,000 jobless claims economists were expecting.

Ongoing claims, which include the number of people who previously received unemployment insurance, fell by 6,000 to 1.67 million, compared with a number that was revised to 1.68 million the previous week. Economists expected an increase.

Earlier this month, initial jobless claims rose to their highest level since February, which seemed to indicate a slowdown in the job market. But Thursday’s numbers suggest the job market remains resilient and, at this point, is holding up to the Fed’s efforts to cool the economy.

The S&P 500 fell 1.5 percent in Thursday morning trade. Ahead of the data release, futures tipped the benchmark index to open about 0.3 percent lower.

Separately, the Commerce Department released its final estimate for the country’s real third-quarter gross domestic product, which was unexpectedly revised to an annualized rate of 3.2 percent from a previous estimate of 2.9 percent.

The update “primarily reflected upward revisions in consumer spending and non-residential fixed investment,” the trade department said.

The overall increase in GDP in the third quarter came after two consecutive quarters of economic contraction as exports, consumer spending, non-residential fixed investment and spending by local, state and federal governments increased.

The Fed’s favorite measure of inflation, the personal consumption spending index, which excludes volatile food and energy costs, was revised up quarter-on-quarter to 4.7 percent for the third quarter, compared with a previous estimate of 4.6 percent.

Earlier this month, the US Federal Reserve slowed the pace of its rate hikes. Fed officials were quick to try to dispel any doubts that they would not be putting enough pressure on the economy to bring down inflation, which remains high although it may have peaked.