Tags: Jobless | Claims | Manufacturing

Jobless Claims Fall as Manufacturing Stays Steady

Thursday, 15 Mar 2012 12:19 PM

The number of Americans claiming new jobless benefits fell back to a four-year low last week and manufacturing in the Northeast held up in March, providing more signs the economy was firmly on a self-sustaining growth path.

But a jump in prices paid by manufacturers in New York state and the biggest gain in five months for producer prices in February hinted at potential headwinds facing the economy.

The recent gains in oil and gasoline prices have raised concerns the higher costs could start to squeeze businesses and consumers and put a dent in the recovery.

Still, producer prices last month did not rise as much as economists had expected, and underlying inflation pressures were contained.

Initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 351,000, the U.S. Labor Department said on Thursday. That took claims back to a four-year low reached in February.

Separately, the New York Federal Reserve said its Empire State general business conditions index rose to 20.21 — its highest level since June 2010 — from 19.53 in February.

"This suggests that the recovery is firmly on track," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

But the components were more mixed, with new orders easing and prices paid racking up their biggest monthly jump in 6-1/2 years.

That was in contrast to a report on factory activity in the mid-Atlantic region, where prices paid rose more slowly in March than in February. The Philadelphia Federal Reserve Bank's business activity index showed manufacturing also continued to grow in the region, rising to 12.5 from 10.2.

Thursday's reports were the latest to imply the economy was holding its own, even though the pace of growth was expected to slow this quarter from the fourth quarter's 3.0 percent annualized clip.

The data helped Wall Street push higher in mid-morning trading, with the S&P 500 up about 0.2 percent.

HOPEFUL SIGNS ON JOBS

The four-week moving average for new jobless claims, considered a better measure of labor market trends, was unchanged at 355,750.

First-time applications for jobless benefits have been tucked in a tight range since mid-February, a hopeful sign for the labor market, which has enjoyed three straight months of employment gains above 200,000.

The jobless rate held at a three-year low of 8.3 percent in February. The firming labor market tone was reinforced by the manufacturing surveys, which showed factories increased employment this month.

While the Federal Reserve earlier this week acknowledged the recent improvement in the labor market, it remained concerned with the still-high unemployment rate.

The central bank said it expected the jobless rate, which has declined 0.8 percentage point since August, to "gradually" decline.

In a second report, the Labor Department said its seasonally adjusted producer price index increased 0.4 percent last month, quickening from January's 0.1 percent gain.

Economists polled by Reuters had expected prices at farms, factories and refineries to rise 0.5 percent.

Wholesale prices excluding volatile food and energy costs rose 0.2 percent, moderating from January's 0.4 percent increase. While that was in line with economists' expectations, it was the third consecutive month of increases in core PPI.

The Fed said on Tuesday the recent steep run-up in oil and gasoline prices would push inflation up only temporarily.

Overall produces prices were lifted by a 1.3 percent increase in energy prices after a 0.5 percent drop in January. Food prices dipped 0.1 percent after falling 0.3 percent the prior month.

In the 12 months to February, producer prices increased 3.3 percent, the smallest increase since August 2010, after advancing 4.1 percent in January.

Another report showed the number of Americans receiving delinquency notices on their homes rose 1 percent in February from a month earlier, but overall foreclosure filings, which include default notices, scheduled auctions and bank repossessions, dropped 2 percent.

The report from RealtyTrac offered a signal that a backlog of foreclosures, which had been held up as banks sorted out legal problems with loan documentation, was starting to move. This could put further downward pressure on home prices, but eventually lay the ground for a healthier market.

Foreclosure activity jumped 24 percent from a year ago in states where foreclosures must be processed through the courts, while activity tumbled 23 percent in other states. Foreclosure times have stretched longer in the so-called judicial states, contributing to the backlog.

© 2017 Thomson/Reuters. All rights reserved.

   
1Like our page
2Share
724
2012-19-15
Thursday, 15 Mar 2012 12:19 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved