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 U.S. economy was firmly on a self-sustaining growth path.
Initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 351,000, the U.S. Labor Department said 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 – 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, Fla.
The 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-per-cent annualized clip.
Prices for U.S. Treasury debt held losses suffered Wednesday after the claims data, which fell more than economists had expected. The four-week moving average for new claims, considered a better measure of labour 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 labour 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 per cent in February. The firming labour market tone was reinforced by the New York Federal Reserve survey showing factories increased employment this month, and the average workweek more than doubled.
While the Federal Reserve acknowledged the recent improvement in the labour market on Tuesday, it remained concerned with the still-high unemployment rate.
The U.S. 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 per cent last month, quickening from January’s 0.1 per cent gain.
Economists polled by Reuters had expected prices at farms, factories and refineries to rise 0.5 per cent.
Wholesale prices excluding volatile food and energy costs rose 0.2 per cent, moderating from January’s 0.4-per-cent increase. While that was in line with economists’ expectations, it was the third consecutive month of increases in core PPI.
The Federal Reserve said 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-per-cent increase in energy prices after a 0.5-per-cent drop in January. Food prices dipped 0.1 per cent after falling 0.3 per cent the month prior.
In the 12 months to February, producer prices increased 3.3 per cent, the smallest increase since August, 2010, after advancing 4.1 per cent in January.
Gasoline prices rose 4.3 per cent, the largest gain in five months, after gaining 2.0 per cent in February.
Outside food and energy, producer prices were pushed up by pharmaceuticals, which accounted for a third of the increase in core PPI. A rise in prices for civilian aircraft also contributed.
Passenger car prices edged up 0.1 per cent after falling 0.8 per cent the prior month. Light motor trucks prices fell 0.4 per cent after a 0.9 per cent rise the prior month.
In the 12 months to February, core producer prices increased 3.0 per cent after rising by the same margin the previous month.