Rising Jobless Claims, Output Data Fuel Worries About Fragile Recovery

Thursday, 15 Apr 2010 11:40 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
The number of U.S. workers filing new claims for jobless aid soared last week as the backlog from the Easter holiday was processed, adding to worries about the economic recovery, while U.S. industrial output rose less than expected in March.

Initial claims for state unemployment benefits rose 24,000 — the largest increase in two months — to a seasonally adjusted 484,000, the Labor Department said on Thursday. Markets had expected a dip to 440,000.

"Everything on the manufacturing side is clearly pointing to an acceleration," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

"The consumer side, the retail sales data we saw yesterday was off the charts. So there is no reason for me to believe that the labor market has organically turned sour."

In separate data, U.S. industrial production rose 0.1 percent in March. Economists polled by Reuters had expected a gain of 0.7 percent.

Another report showed expansion in New York state manufacturing rose to a six-month high. The New York Federal Reserve's "Empire State" general business conditions index rose to 31.86 in April, the highest since October and up from 22.86 in March. Economists polled by Reuters had expected a figure of 24.00.

Factory activity in the U.S. Mid-Atlantic region, meanwhile, grew in April, to its highest since December 2009.

The Philadelphia Federal Reserve Bank said its business activity index rose to 20.2 in April from the March reading of 18.9. Economists had expected a reading of 20.0.

"Both the Philly and N.Y. Fed reports show improving manufacturing and business conditions. That's consistent with our expectations of a moderate recovery," said Robert Dye, senior economist with PNC Financial Services in Pittsburgh.

U.S. stocks were mixed with the Dow industrials down slightly, with the rise in jobless claims adding pressure to indexes. U.S. Treasury debt prices were steady to slightly lower. The U.S. dollar was up versus the euro and yen.

U.S. industrial production was held back by a drop in utilities output as heating demand fell, the Federal Reserve data showed. Capacity utilization, a closely watched measure of slack in the economy, rose to 73.2 percent from 73.0, although that was still 7.4 percentage points below the 1972-2009 average.

"The sluggish headline was largely the result of a drop in utility output which was a function of the (warm) weather, rather than economic fundamentals," said Michael Moran, chief economist at Daiwa Securities America in New York

A Labor Department official said the increase in claims last week was mainly due to administrative factors rather than economic ones. "I don't think there is a whole lot of layoffs going on," he said.

The four-week moving average of new claims, which irons out week-to-week volatility, rose 7,500 to 457,750.

The surge in claims last week is unlikely to derail the nascent jobs recovery, analysts said. A sign of the improving labor market tone was also evident in the New York Fed survey.

The employment index rose to 20.25 in April, the highest since March 2006, and up from 12.35 last month. New orders rose to a six-month high of 29.49 in April and up from 25.43 last month.

The labor market has lagged the U.S. economic recovery, but growing evidence of firming domestic demand could ease some doubts about the durability of the economic bounce and encourage companies to step up hiring.

Retail sales surged in March in data published on Wednesday and businesses have started rebuilding inventories.

Analysts hope that this could help the economic recovery to transition into a self-sustaining one.

The recovery from the worst downturn in 70 years has been largely powered government stimulus and a surge in manufacturing as businesses start to replenish inventories.

In Thursday's data, the number of people still receiving benefits after an initial week of aid rose 73,000 to 4.64 million in the week ended April 3, the Labor Department said.

Analysts had forecast so-called continuing claims little changed at 4.54 million.

The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, rose to 3.6 percent in the week ended April 3, from 3.5 percent in the prior period.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Pope Seeks to Bring Faith to 'Ends of the Earth'

Saturday, 19 Apr 2014 18:26 PM

Pope Francis baptized 10 people Saturday and urged them to bring their faith to the ends of the Earth as he presided o . . .

Conservatives Deride Effort to Rig Electoral College

Saturday, 19 Apr 2014 19:37 PM

Conservatives slammed the campaign to effectively end the Electoral College's role in presidential elections, saying tha . . .

Fox Executive Fired Over Flight 370 Charity Email

Saturday, 19 Apr 2014 18:22 PM

A veteran Fox executive who used her company email account to plan aid for loved ones of the missing Malaysian airplane' . . .

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved