New data show the U.S. job market becoming a bit stronger, while credit card costs are increasing for American consumers.
Thursday’s report from the Labor Department says the number of newly-laid off workers signing up for assistance fell 8,000 last week to a nationwide total of 237,000. Experts say any level below 300,000 indicates strong demand for workers and a healthy job market. Jobless claims have been under this benchmark now for well over two years, the longest streak since 1970.
On Wednesday, the U.S. central bank cited the improving job market as evidence that the economy no longer needs the boost it has been receiving from ultra-low interest rates. The Federal Reserve increased the key interest rate by a quarter of a percent. It is the latest in a series of gradual increases intended to bring interest rates closer to the average rates seen over the past few decades.
While economists say the increases are a vote of confidence in the economy, higher rates also raise costs for consumers who have run up credit card bills. The business group WalletHub says U.S. consumer credit card debt will likely exceed $1 trillion this year, a record high. The company says that means a quarter of a percentage point interest rate hike will cost consumers an extra $1.5 billion this year.
Wednesday’s action is the latest of several rate increases, and if all the higher costs are tallied, the bill for consumers will be $6 billion more this year than it would have been in the past.