Jobless claims data brightens US jobs picture
By Lucia Mutikani, ReutersWASHINGTON -- The number of Americans filing new claims for unemployment benefits dropped for a third straight week last week, the latest indication the labor market recovery was gaining traction.
March 15, 2013, 12:25 am TWN
Other data on Thursday showed a spike in the cost of gasoline pushed up producer prices last month, but the lack of broad price pressures gives the Federal Reserve scope to maintain its very accommodative monetary policy stance even as the job market strengthens.
Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 332,000, the Labor Department said. Economists polled by Reuters had expected first-time applications for jobless aid to rise to 350,000.
The four-week moving average for new claims, a better measure of labor market trends, fell 2,750 to 346,750, the lowest level in five years — suggesting a firming in underlying labor market conditions.
The report follows news last week that nonfarm payrolls increased 236,000 in February, with the unemployment rate falling to a four-year low of 7.7 percent.
“This report reinforced the message we got from last Friday's payroll report. There is a speed-up in the economy. The economy is healing,” said Pierre Ellis, senior global economist at Decision Economics in New York.
PPI Increases by 0.7%
In a second report, the Labor Department said its seasonally adjusted Producer Price Index increased 0.7 percent last month after advancing 0.2 percent in January.
In the 12 months through February, prices received by farms, factories and refineries were up 1.7 percent, the fastest rise since October and followed a 1.4-percent gain the prior month.
However, underlying inflation pressures remained contained, with wholesale prices excluding volatile food and energy costs rising 0.2 percent after a similar advance in January.
In the 12 months through February, core PPI was up 1.7 percent, the smallest rise since January 2011. It had increased 1.8 percent in January.
While gasoline prices pushed up overall PPI last month, they have started to decline from their lofty levels, which should keep inflation pressures benign and boost consumers' purchasing power.
The steady job gains are helping to prop up wages, supporting domestic demand. Though layoffs have ebbed, sluggish domestic demand has made companies cautious about ramping up hiring.